Struggling with debt can be overwhelming enough without the added stress of wage garnishment. When a judgment for a debt has been obtained, it is likely that the party against whom the judgment is being enforced will be subject to wage garnishment. Personal bankruptcy options provide resources to help stop collection actions and prevent additional collection activity, including wage garnishment in some circumstances.
When a bankruptcy petition is filed, such as for Chapter 7 bankruptcy, an automatic stay goes into effect which prevents additional collection actions and stops those in progress. This may provide relief and stop wage garnishment for a party struggling with debt. In some circumstances, in addition to stopping the wage garnishment, some of the wages already garnished may be recovered.
There are generally two types of personal bankruptcy to consider. Each provides for a temporary stay while the bankruptcy process proceeds, during which time collection actions against the filing party cannot proceed and new collection actions are not initiated. Chapter 7 bankruptcy is a liquidation bankruptcy option available to parties who qualify. Chapter 13 bankruptcy is a reorganization bankruptcy option available to parties who have a reliable source of income to repay debts according to a repayment plan developed with the assistance of the bankruptcy court.
Financial struggles can take a toll on anyone working hard and struggling to keep up. Different personal bankruptcy options are available for different circumstances and may provide relief from wage garnishment for Tennessee resident who are facing these types of challenges.