When you fall into debt, it can be an incredibly difficult obstacle to overcome. And even when you have made your best efforts to pay back overdue notices and late fees, you may not be able to keep up. When that happens, your creditors will use a court order to garnish your wages to resolve your debt. And if you have filed for bankruptcy to stop garnishment and your debt has been dismissed, what happens to your back wages? In certain circumstances, you can work with Atlanta bankruptcy attorneys to recover the wages that were taken before your bankruptcy filing.
At CMC Law, we will provide the advice and answers you need so you can achieve the outcomes you deserve.
Filing for Bankruptcy to Stop Garnishment
When you file for bankruptcy to stop garnishment, your creditors are placed in an automatic stay that prevents them from engaging in collections until your case has been processed. If your judge decides to discharge your debt, then your creditors must cease all wage garnishment moving forward. If you were struggling with your finances before the stop garnishment, you may want to try recovering the back wages that were taken before your petition was filed.
Recuperating Wages that Were Garnished Before Your Filing
While it can be challenging to get back the wages that were taken before your stop garnishment, there are certain situations where you may want to attempt it. If your creditor garnished your wages three months before your bankruptcy filing, you might be able to recover these funds if you can claim an exemption. These specific exemptions vary by state but can be used in your case if you are a lower-income earner and your wage garnishment prevented you from paying basic living expenses or if you have dependents and can prove the wage garnishment kept you from fulfilling your parental responsibilities.
Also, when creditors attempt to garnish your wages, there are restrictions on the percentages that can be taken from each of your paychecks. While those are determined by each state, creditors generally cannot take more than 25% of your earnings when conducting standard wage garnishment. If you can prove that your creditor took more than the pre-approved amount, you may want to pursue an adversary filing.
Filing for Adversary Proceedings
If you believe you are entitled to the wages that were taken before your stop garnishment, you can work with your Atlanta bankruptcy attorney to file adversary proceedings. When this happens, it means your attorney is filing a separate lawsuit within your bankruptcy against your creditor. However, you should seek advisement from your attorney to decide if this course of action is worth pursuing. In some instances, it may not be the most cost-effective option because the amount you would spend for the adversary filing could be higher than the amount that you would earn if you won your case.
The Experts at CMC Law Can Help You Recover Back Wages
If you believe you are entitled to recoup back wages that were taken before your stop garnishment, the Atlanta bankruptcy attorneys at CMC Law can help. Using their extensive expertise, they can recover your earnings so you can get the fresh start you need to rebuild your finances.
Contact us today to schedule a free consultation.
When you work with CMC Law, you are guaranteed to receive comprehensive and compassionate care that supports your fiscal goals.