Consumers file bankruptcy for several reasons one of which is to stop a garnishment on their paychecks or bank accounts. Most consumers file a chapter 7 or chapter 13 bankruptcy, both will give you the protection of the automatic stay. The automatic stay goes into effect the moment your case is filed. Repeat filers with successive cases may not be able to take advantage of the automatic stay upon filing depending on when their previous cases were filed.
The automatic stay prevents creditors from contacting you in anyway. Your creditors will stop sending monthly statements; this may include your mortgage company as well. If you wish to keep your home, keep paying your mortgage even if you are not receiving statements and document evidence of your mortgage payments. Any automatic payments you have set-up with creditors will also stop, again if these automatic payments are paying for a home or car you want to keep, make the payments on your own.
The stay prevents creditors from attempting to collect a debt through legal means. A creditor is unable to take you to court or attempt to collect on a previous judgment by garnishing your bank accounts or pay checks once your bankruptcy case is filed.
The automatic stay is a huge benefit for people filing for bankruptcy. The automatic stay forces creditors to go through the bankruptcy court if they wish to collect on their debt. Some secured creditors can request the bankruptcy court lift the automatic stay if you are not paying on a secured loan.
If you are burdened by a garnishment on your paycheck or bank accounts, arrange a free bankruptcy consultation with a Kansas City Bankruptcy Attorney to determine if filing for bankruptcy is in your best interests.