File Bankruptcy & Stop Wage Garnishment in San Jose
Bankruptcy is the only way to permanently stop wage garnishment in San Jose. When your employer is served with an Earnings Withholding Order you have two options for stopping the wage garnishment. One, you can file a claim of exemption and hope that the creditor does not object and force a hearing on the matter. Two, you can file bankruptcy. When you file bankruptcy the creditor is prohibited by the automatic stay from continuing the wage garnishment. Furthermore, in bankruptcy you can discharge the underlying debt after which the creditor will be prohibited from collecting upon the debt. For many San Jose residents facing wage garnishment the better option is clear.
How Bankruptcy Stops Wage Garnishment
Federal law prohibits creditors from continuing a wage garnishment after the debtor has filed bankruptcy. Under 11 USC 362(a) the filing of a bankruptcy petition creates the automatic stay which is a prohibition of most collection efforts, including wage garnishment. The purpose of the automatic stay is twofold; one, to prevent creditors from stripping the debtor of assets at the expense of competing creditors and two, to force creditors to participate in the bankruptcy system. Should a creditor with knowledge of the bankruptcy filing willfully violate the automatic stay they may be subject to contempt of court actions or other causes of action.
Why Bankruptcy Is The Best Way To Stop Wage Garnishment
You can stop wage garnishment by filing a claim of exemption, but that is only a temporary solution. The creditor can always file another earnings withholding order and restart the wage garnishment process. With every served wage garnishment you must once again file a claim of exemption and run the risk that the creditor will object and set the matter for hearing. In essence, the judgment will remain and your risk for wage garnishment will continue until you pay off the debt. In contrast, bankruptcy is a permanent solution. When you file bankruptcy in San Jose and discharge the underlying debt you will no longer owe upon the judgment. You will eliminate your liability under the judgment and remove the possibility of a future wage garnishment. In so many words, bankruptcy is a permanent solution to wage garnishment whereas filing a claim of exemption is just a temporary one.
Which Chapter Is Best For Stopping Wage Garnishment?
Only an attorney can answer that question after an initial consultation. Both chapter 7 and chapter 13 bankruptcy will stop a wage garnishment, but chapter 7 bankruptcy will eliminate unsecured debts faster than chapter 13. Most chapter 13 plans are not repaid and therefore most chapter 13 petitioners do not receive a discharge. For many chapter 7 bankruptcy is the most assured way eliminating the underlying debt. However, not everyone qualifies for chapter 7 bankruptcy. To qualify for chapter 7 bankruptcy your annualized household income must be lower than the state median for a household of your size. If your income exceeds this threshold you must pass the means test calculation. For many San Jose residents with moderate income chapter 7 bankruptcy will not be an option. To determine which bankruptcy chapter is in your best interest contact our bankruptcy attorney at sacramentolawgroup.com/san-jose-bankruptcy-attorney for a free consultation.