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When you're already struggling to make ends meet, discovering that a portion of your paycheck is being taken before you even see it can feel devastating. If you're facing wage garnishment after a default judgment in Southwest or Central Missouri, you need to know that you have options to protect your income and regain control of your financial situation.
If creditors are taking money directly from your paycheck, you need to act now. Call (417) 213-5006 or fill out our online contact form to learn how bankruptcy can stop wage garnishment immediately.
What Is Wage Garnishment?
Wage garnishment happens when a creditor obtains a court order requiring your employer to withhold a portion of your earnings to pay off a debt. This typically occurs after a creditor has sued you, won a judgment against you in court, and obtained the legal right to collect what you owe through your wages.
In Missouri, creditors can garnish up to 25% of your disposable earnings or the amount by which your weekly wages exceed 30 times the federal minimum wage, whichever is less. While certain types of income like Social Security benefits are generally protected, your regular paycheck may be vulnerable.
For many families living paycheck to paycheck, losing even a portion of their income can mean choosing between rent and groceries, or utilities and medications. The good news is that you don't have to accept this situation as permanent.
How Default Judgments Lead to Wage Garnishment
Understanding how you arrived at this point can help you see the path forward. A default judgment occurs when you're sued by a creditor but don't respond to the lawsuit or appear in court. When this happens, the court typically rules in favor of the creditor automatically.
Once a creditor has a judgment against you, they have several collection tools at their disposal:
- Wage garnishment: Taking money directly from your paycheck
- Bank account levies: Freezing and withdrawing funds from your accounts
- Property liens: Placing claims against property you own
Many people don't realize they've been sued until they receive notice of a judgment or discover their wages are being garnished. Court documents may have been sent to an old address, or you might have overlooked notices during a particularly stressful time. Regardless of how it happened, a default judgment gives creditors significant power to collect from you.
The Automatic Stay: Your Immediate Protection
When you file for bankruptcy, something powerful happens immediately—the automatic stay goes into effect. This is a legal protection that stops most collection activities against you, including wage garnishment.
The automatic stay works like a legal shield. Once your bankruptcy petition is filed with the court, creditors must stop:
- Garnishing your wages
- Calling you about debts
- Sending collection letters
- Filing or continuing lawsuits
- Repossessing property
- Foreclosing on your home
This protection begins the moment your case is filed, which means your next paycheck could be whole again. Your employer will receive notice that the garnishment must stop, and you'll have breathing room to work through your financial situation.
Chapter 7 vs. Chapter 13 Bankruptcy for Wage Garnishment
Both Chapter 7 and Chapter 13 bankruptcy can stop wage garnishment, but they work differently. Understanding these differences can help you have a more productive conversation with a bankruptcy attorney about which option might work for your situation.
Chapter 7 Bankruptcy
Chapter 7 is often called "liquidation bankruptcy." It typically takes three to six months to complete and can eliminate many types of unsecured debts like credit cards, medical bills, and personal loans.
When you file Chapter 7:
- The automatic stay stops the wage garnishment immediately
- Most unsecured debts are discharged (eliminated)
- Once the debt is discharged, the creditor cannot restart the garnishment
- You can move forward without that debt hanging over you
Chapter 7 can be a good option if you have limited income and few assets. However, not all debts can be eliminated through Chapter 7, including most student loans, recent tax debts, and domestic support obligations.
Chapter 13 Bankruptcy
Chapter 13 works differently—it's a repayment plan that typically lasts three to five years. Instead of eliminating debts immediately, you make monthly payments to a trustee who distributes the money to creditors according to a court-approved plan.
Benefits of Chapter 13 include:
- Stopping wage garnishment immediately through the automatic stay
- Consolidating your debts into one manageable monthly payment
- Potentially paying less than you owe over time
- Catching up on secured debts like mortgages or car loans
- Keeping property you might lose in Chapter 7
Chapter 13 can work well if you have regular income and want to keep certain assets while getting caught up on payments. The garnishment stops as soon as you file, and you make payments through your plan instead.
What Happens After You File?
Understanding the timeline can help reduce anxiety about the process. Here's what typically happens after you file for bankruptcy to stop a wage garnishment:
- Within 24-48 hours: Your attorney notifies your employer and the creditor about your bankruptcy filing. The garnishment should stop with your next paycheck.
- First few weeks: The bankruptcy trustee reviews your case. Creditors receive official notice and must stop all collection activities.
- 30-40 days after filing: You attend a meeting of creditors (341 meeting) where the trustee asks questions about your financial situation. This is typically straightforward and your attorney will be with you.
- In Chapter 7: After about 60-90 days following the 341 meeting, you receive your discharge order, eliminating qualified debts. The garnishment cannot be restarted for discharged debts.
- In Chapter 13: You begin making monthly plan payments. As long as you stay current with your plan, the garnishment stays stopped, and after completing your plan (3-5 years), remaining qualified debts are discharged.
Special Circumstances and Limitations
While bankruptcy is powerful, it's important to understand some limitations. Certain types of wage garnishments may not be stopped by bankruptcy, including:
- Child support or alimony payments
- Most student loan garnishments (though there may be options to address these in Chapter 13)
- Recent tax debts in some cases
Additionally, if you've filed bankruptcy within the past several years, you may face restrictions on filing again or receiving a discharge. An experienced bankruptcy attorney can evaluate your specific situation and explain what protections are available to you.
Taking the First Step
If you're experiencing wage garnishment after a default judgment, time matters. While you can technically file bankruptcy on your own, having knowledgeable legal guidance can make the difference between a smooth process and costly mistakes.
During a consultation, a bankruptcy attorney can:
- Review your financial situation and the default judgment against you
- Explain which type of bankruptcy would work for your circumstances
- Calculate how much of your debt could be eliminated or restructured
- Discuss the timeline and what to expect throughout the process
- Answer your specific questions about protecting your income and assets
The consultation gives you information to make a confident decision about your next steps. You'll leave understanding your options and whether bankruptcy is the right choice for stopping your wage garnishment and addressing your debt.
Get Help Stopping Wage Garnishment in Southwest and Central Missouri
Wage garnishment doesn't have to drain your paycheck any longer. When you're ready to explore how bankruptcy can help you stop garnishment and regain financial stability, Licata Bankruptcy Firm is here to guide you through the process with clarity and care.
We understand how stressful it is to watch your hard-earned money disappear before you can use it for your family's needs. Our team focuses on bankruptcy law and serves individuals throughout Southwest and Central Missouri who need relief from overwhelming debt and aggressive collection actions.
Take the first step toward protecting your income today. Call (417) 213-5006 or contact us through our online form to schedule a consultation. We'll review your situation, explain your options, and help you understand how bankruptcy could stop your wage garnishment and give you a fresh financial start.