If a creditor is garnishing your paycheck, has frozen your bank account, or has sued you, you may feel like you have no way out. Filing bankruptcy can stop all of it, often the same day.
The Automatic Stay
As soon as your bankruptcy petition is filed, a court order called the automatic stay goes into effect. It requires creditors to stop almost all collection activity, including:
- Wage garnishments
- Bank account levies
- Collection lawsuits and pending court cases
- Phone calls, letters and emails demanding payment
- Foreclosure sales and most repossessions
- Utility shutoffs (for a period of time)
Creditors who knowingly violate the automatic stay can be held responsible for damages.
Stopping a Wage Garnishment
Once you file, we notify your employer and the levying officer so the garnishment stops. In some cases, money taken from your paycheck in the 90 days before filing can be recovered, depending on the amount and the exemptions that apply.
What Happens to a Lawsuit Against You?
If a creditor has sued you over a credit card, medical bill or personal loan, the lawsuit is put on hold when you file. If the debt is discharged in your bankruptcy, the creditor can never collect it, and the case is typically dismissed. Even a judgment that has already been entered can usually be discharged if it is based on a dischargeable debt.
How Fast Can You File?
If you are facing an urgent deadline, such as a foreclosure sale tomorrow or a bank levy, it is sometimes possible to file an emergency petition with only the essential documents and complete the rest within 14 days. Before filing, you must complete a short credit counseling course, which can be done online in about an hour.
Do Not Wait Until It Is Too Late
Every paycheck that is garnished is money you will likely not get back. If collectors are calling or you have been served with a lawsuit, it is worth getting a free consultation now so you understand your options.
Talk to an Orange County Bankruptcy Attorney
Every situation is different, and the right choice depends on your income, your property and your goals. Call Madaen Law at (714) 782-7275 or send us a message for a free consultation. We help clients throughout Orange County, Los Angeles County and San Diego County.
Disclaimer: This article is for general informational purposes only and is not legal advice. Reading this article, or contacting us through this website, does not create an attorney client relationship. Bankruptcy laws, exemption amounts and court procedures change over time, and the right approach depends on the specific facts of your situation. Please consult a licensed attorney before making any decision about your case.
This website may be considered attorney advertising. Prior results do not guarantee a similar outcome. Law Office of Madaen, Bahram Madaen, Attorney at Law, licensed in California.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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