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St Louis Bankruptcy: Will A Bankruptcy Stop A Wage Garnishment?

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Yes, it most certainly will stop a wage garnishment. Once the St. Louis bankruptcy is filed, the creditor is notified of this fact, and they will send a release to your payroll department. A more thorough explanation is given below:

A creditor may only obtain the right to execute a garnishment of your wages by way of a judgement from the court. In other words, a creditor can’t just decide to start taking money from your paychecks. They must first follow all the procedural steps that the court system requires. First, the creditor must file a lawsuit against you (usually it is described as a breach of contract). Second, you must be served with a summons to appear in court (this is the document that the sheriff or process server gives you at your home or place of work). Third, there must be a hearing on the matter before the judge. Fourth, the court must rule in favor of the creditor. And fifth, the creditor must file all necessary paperwork with the court to execute the wage garnishment (which is subsequently sent to your payroll department).

At that point, your payroll has no choice but to begin garnishing your wages (and if your employer does not, then they are on hook and can be held liable if they do not comply with the order). The maximum amount that the creditor can take is 25% of your net earnings (but if you qualify for Head-of-Household status, then it can be reduced to 10%).

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But the filing of a St Louis bankruptcy will absolutely stop the garnishment (along with all other creditor activity; indeed, they can never call you again after the case is filed). If it is a St Louis Chapter 7, then this creditor (as well as every other unsecured creditor) will be discharged. If it is a St Louis Chapter 13, then it is possible that a portion of your unsecured debts may be paid back (over a three (3) to five (5) year period). Either way, the garnishment comes to an end once the case is filed.

The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.