Can Filing Bankruptcy Stop Wage Garnishment in Texas?

 Posted on August 28, 2023 in Debt Collection

Few financial situations feel more stressful or overwhelming than having your hard-earned wages garnished by creditors. However, filing for bankruptcy in Texas may stop ongoing wage garnishments in their tracks while also permanently eliminating the underlying debt through discharge so you can recover and regain financial stability. Here is an extensive look at how declaring bankruptcy with a lawyer can halt creditor wage garnishment.

How Bankruptcy’s Automatic Stay Stops Collections

When you file a Chapter 7 or Chapter 13 bankruptcy petition in Texas, an "automatic stay" will go into effect immediately under federal law. This triggers a broad legal injunction that prohibits any continued garnishment of your wages and halts all collection activity against you. The automatic stay specifically prevents creditors and collectors from pursuing repossession of property, foreclosure of homes, disconnection of utilities, civil litigation against you, or any other debt collection activities. They cannot legally garnish your wages or bank accounts after you file bankruptcy without getting the stay lifted.

Texas Bankruptcy Eliminates Debt Through Discharge

Beyond stopping the immediate wage garnishment, filing bankruptcy can also permanently eliminate the underlying debt obligations that led creditors to pursue garnishing your wages in the first place. Declaring Chapter 7 bankruptcy in Texas fully discharges many types of unsecured debt like credit cards, medical bills, personal loans, utility bills, and more, giving you a fresh start. Chapter 13 bankruptcy similarly allows discharge of some unsecured debts after successfully completing your three to five-year repayment plan under the court’s protection.

Act Quickly to Minimize the Garnishment Amount

The key is acting promptly to file your bankruptcy petition and schedule once wage garnishment starts since some creditors garnish wages aggressively. This minimizes the total dollar amount that can be deducted from your paychecks before the bankruptcy automatic stay takes effect to halt the garnishment. Delaying filing bankruptcy can cost you much more money over time as the unpaid debt continues accruing and the ongoing garnishments keep accumulating.

Regain Financial Peace of Mind Long-Term

An additional benefit of eliminating your debt obligations through the bankruptcy discharge is creditors have no remaining basis to pursue further wage garnishment against you in the future. You gain lasting financial peace of mind and a fresh start so you can recover and move forward after bankruptcy without fear of additional garnishments down the road. The discharge protects you from further collection on discharged debts.

Contact a San Antonio Bankruptcy Attorney

You deserve to regain a sense of financial ease. Bankruptcy may be the best option for you. With a Texas bankruptcy lawyer on your side, you can navigate the process more easily. Call Law Offices of Chance M. McGhee at 210-342-3400 today for a free consultation.