Debt can be debilitating, when it feels like there is a claim on every cent of your income as you earn it. But this could turn literal when a creditor gets a court order to start collecting before you ever see your paycheck.
There are limits on how much a creditor can claim from your wages, but they’ll be cutting into your income any way you look at it. This can make it harder to pay priority debts and cover living expenses. But you’re not out of luck when the judgment comes since bankruptcy might provide some cover from garnishment.
A creditor will usually need a court order to begin taking a share of your pay. This order goes to your employer, who will surrender a cut toward paying your debt. The Department of Labor offers some protections to those who find themselves in this situation, but the answer to your problems may rest elsewhere.
An automatic stay could halt the siphon, and courts will typically put one into place as soon as you file for bankruptcy. This essentially places a hold on your debtors, and the stay will place limits on the actions they can take against you during this period. The stay will usually expire once your filing is complete, but by that time the process may forgive the debts that were taking a bite out of your wages.
There are exceptions to the power of the automatic stay and they usually crop up when you’re dealing with orders from the government. Support orders after a divorce, audits by the Internal Revenue Service and court fines may override short-term halts. You could also be out of luck if you’re returning to the bankruptcy well one too many times. Multiple filings could lead to a limited stay, or get your request denied altogether.
Getting your entire paycheck back may be the first step towards regaining control over your finances. Know how an automatic stay can get you relief, and you may be on your way out of debt.