Bankruptcy is an important tool in debt relief, especially for those being negatively impacted by debt collection efforts. Lawsuits, judgments, wage garnishments and repossessions are just a few of the problems that can arise because of debt collection and they can derail your entire financial future. Filing for bankruptcy can stop these proceedings under a court order called the automatic stay.
Nothing is more disconcerting than receiving your paycheck and finding that a portion of it has been taken out due to a wage garnishment. This can even jeopardize your job by reflecting badly on you to your employer. If a creditor receives permission form the court to garnish your wages, they are entitled to up to 25% of your earnings and all of the money in your checking and savings accounts. They can continue to take this money until the debt is repaid or until bankruptcy is filed. Filing for bankruptcy is like putting a wall between you and your creditors, blocking their access to your money. This is referred to as an automatic stay.
Once an automatic stay is in place, all collection proceedings must legally stop. This means your creditors are not allowed to contact you in any way or make any other attempts to collect debt. An automatic stay can help alleviate some other financial emergencies as well. These include utility disconnections, foreclosure, eviction (very temporary relief), and collection of overpayment of public benefits. Individual creditors can ask the stay to be lifted but their legal grounds to do so are very limited.
A Utah bankruptcy attorney can help you decide if filing for bankruptcy is the right choice for you. If you or your family is suffering from the effects of wage garnishment or other serious financial problems, relief could be just around the corner. Filing for bankruptcy will allow the court to put an automatic stay in place to give you time to come up with a plan of how you are going to manage your debt. Much of your debt can be eliminated altogether once your bankruptcy is discharged, giving you a fresh start.