You’re facing a number of different issues with your finances. Now, you may be getting your wages garnished or afraid it’s going to happen soon. One of your options could be to file for bankruptcy in Ohio.
By learning more about wage garnishments and bankruptcy, you can decide if filing is the right move for you at this time.
What Is Wage Garnishment?
Wage garnishment occurs when your employer withholds a certain amount of money from your paycheck in order to send it to a creditor you owe. There are laws that dictate who exactly can garnish your wages and how much they are allowed to take.
Why Does Wage Garnishment Happen?
You may get your wages garnished if your debt has gone into collections with a creditor and you are not responding to their communication, such as emails, phone calls, and letters. That creditor may then request that your employer starts garnishing your wages to pay them back.
Additionally, if you have unpaid income taxes, spousal support, or court-ordered child support – or you defaulted on your student loans – then your wages may also be garnered.
Under Ohio law, creditors need to limit withholding whichever is less: Either 25% of your disposable earnings or disposable earnings less 30 times the federal minimum wage.
Does Bankruptcy Stop Wage Garnishments?
Bankruptcy can put an end to wage garnishments. When you file for bankruptcy in Ohio, the court will put an automatic stay on your wage garnishments and any other collections you’re facing. As long as the stay is in place, creditors cannot make you pay. However, they can attempt to petition the court to lift the stay.
Deciding Between Chapter 7 and Chapter 13 Bankruptcy
Most people will choose between Chapter 7 and Chapter 13 bankruptcy when filing. Knowing the differences between the two is crucial.
When you file for Chapter 7 bankruptcy, many forms of your unsecured debt can be erased, and you won’t have to pay it back. With Chapter 13, you will have to pay back some or all of your unsecured debt. If you are behind on your mortgage and you file for Chapter 7, then you could lose your home. But if you file for Chapter 13, you can keep your home. You can file Chapter 7 once every eight years and Chapter 13 whenever you need it.
Keep in mind that when filing for bankruptcy, you will still owe your unpaid income taxes, child support, and spousal support. Also, if you have student loan debt, very rarely can it be discharged in a bankruptcy.
Hiring a Bankruptcy Attorney
Prior to filing for bankruptcy, you should look into your different options with the help of a bankruptcy attorney. They may suggest making payment plans with your creditors, going into a debt management program, negotiating debt with creditors, and other ideas so that you won’t have to file. Filing for bankruptcy is a dramatic move, and deciding to do it should not be taken lightly. It’s best to contact a professional before making any big decisions.
Get in Touch With Richard P. Arthur
Richard P. Arthur, Attorney at Law, can help you file for bankruptcy and put an end to wage garnishments. You can call 937-254-3738 for a consultation. He has more than three decades of experience helping clients in Dayton and Trotwood, as well as Montgomery, Greene, Miami, Clark, and Warren counties.