If you are planning on filing for bankruptcy, you may be wondering if bankruptcy will stop wage garnishment in Ohio. Wage garnishment can have a significant impact on your life, especially if you are already in a difficult financial situation.
Do you want to know more about wage garnishment laws in Ohio and how these coincide with filing for bankruptcy? If so, check out this article, where we will be discussing how to stop wage garnishment in Ohio and how bankruptcy can help you with this.
What Is Wage Garnishment in Ohio?
Wage garnishment in the state of Ohio allows someone to garnish your wages, taking directly from your wages or your bank account. Before this happens, the court will send you a demand letter detailing the judgment amount you owe, along with options available to help you avoid wage garnishment. If you fail to follow the instructions outlined in the notice, the court will allow the creditor to start the process of garnishing your wages.
Many people can face wage garnishment for a variety of debt, including credit card debt, medical debt, and missed child support payments. In most instances, wage garnishment is one of the last options creditors use when all other collection efforts have failed.
How Bankruptcy Stops Wage Garnishment
If you are facing wage garnishment, the good news is that filing for bankruptcy can help you put a stop to this. When you file for bankruptcy, an automatic stay instantly takes effect, stopping all collection efforts. Creditors will not be allowed to engage in any collection activity as this would put them in violation of the automatic stay.
The purpose of this automatic stay is to give you the chance to regain control of your financial situation and find the best course of action. It helps put a stop to collection efforts such as foreclosures, evictions, wage garnishment, repossession, and harassment.
Chapter 7 vs Chapter 13 for Garnishment Relief
To better understand how to stop wage garnishment in Ohio, you need to understand Chapter 7 in Ohio and Chapter 13 when it comes to wage garnishment. These are the most common types of bankruptcy but they will apply to different situations and may handle wage garnishment in different ways.
Chapter 7 bankruptcy often allows for the majority of your debt to be discharged, so that is no longer your responsibility. This is often a straightforward and quick process that can result in your wage garnishment being permanently discharged in many instances.
On the other hand, Chapter 13 bankruptcy is a repayment type of bankruptcy designed for individuals with a higher income. You will need to file for Chapter 13 if you do not meet the income requirements for Chapter 7. When you file for Chapter 13, a 3 to 5 year repayment plan will be created for you, allowing you to address your debts in a realistic manner.
If you aren’t sure which option is best for your situation, you need to hire a bankruptcy attorney. They can help you evaluate what type of bankruptcy you qualify for and can help you get the process started so that you are protected by the automatic stay.
Exceptions to the Rule
It is important to remember that there are always exceptions to the rule, even when it comes to wage garnishment and bankruptcy in Ohio. For instance, the automatic stay will not apply to criminal proceedings as this can hinder justice. Additionally, child support and alimony will not be included in the automatic stay.
Any type of domestic support obligation is considered to be a priority under the Ohio bankruptcy laws, which could still put you at risk. So, if you are behind on child support or alimony payments, wage garnishment may continue even if you have filed for bankruptcy. This can also apply to situations where you owe on student loans or certain types of tax debts.
If you have debts that qualify for any of these exceptions, you need to take the additional step of hiring a bankruptcy attorney in Ohio. An Ohio attorney will be up to date with the state-wide bankruptcy laws and can help you move forward with your case. This can include negotiating with creditors to create a payment plan for addressing debts not covered by the automatic stay.
FAQ Section
How soon will the garnishment stop?
When you file for bankruptcy, an automatic stay will immediately take effect, which will protect you from wage garnishment. However, this isn’t the case if the wage garnishment is due to domestic support obligations, certain types of tax obligations, some student loans, or criminal proceedings.
Can I recover wages already taken?
Although not always the case, you may be able to recover some of your garnished wages if they were taken 90 days before you filed for bankruptcy. For this to be a possibility, you need to be able to prove that you have an exemption you can claim that would entitle you to a refund. You can also get a refund if creditors have over-garnished your wages.
What debts still allow garnishment after bankruptcy?
The primary types of debts that are not protected by the automatic stay are things like child support and alimony. Although, other instances may also be exempt from the automatic stay, such as criminal proceedings, tax debts, and student loans.
What if creditors garnish again post-bankruptcy?
Creditors have the ability to garnish your wages post-bankruptcy if your case is dismissed or the automatic stay does not apply. If creditors continue to garnish your wages, violating the automatic stay, they can be held in contempt and ordered to repay the lost wages and any potential damages.
Hire a Bankruptcy Attorney in Ohio
Depending on your financial situation, filing for bankruptcy can help you stop wage garnishment so that you can begin the process of recovering financially. Richard P. Arthur, Attorney at Law, has extensive experience handling bankruptcy cases in the state of Ohio and can help you understand what your options are. To move forward with your bankruptcy case, contact us today at 937-254-3738 for a free consultation.