Can Bankruptcy Help Stop Wage Garnishment in Tennessee?

In Tennessee, wage garnishment can be a daunting experience for those facing overwhelming debt. However, many individuals wonder if filing for bankruptcy can provide relief from this financial burden. The short answer is yes, bankruptcy can help stop wage garnishment in Tennessee, but it’s essential to understand how the process works and the implications involved.

When you file for bankruptcy in Tennessee, an automatic stay goes into effect immediately. This legal protection halts most collection actions, including wage garnishment. Creditors are prohibited from continuing their efforts to collect debts while your bankruptcy case is pending, allowing you to regain control over your finances.

There are two primary types of bankruptcy that individuals in Tennessee may consider: Chapter 7 and Chapter 13. Each serves different needs and circumstances, impacting how wage garnishment is addressed.

Chapter 7 Bankruptcy: This type of bankruptcy is often referred to as liquidation bankruptcy. It allows individuals to discharge most unsecured debts, such as credit card bills and medical expenses. If your wages are currently being garnished, filing for Chapter 7 will put an end to the garnishment process. However, it’s important to note that certain debts, such as child support and tax obligations, may not be dischargeable under Chapter 7.

Chapter 13 Bankruptcy: Unlike Chapter 7, Chapter 13 bankruptcy involves a repayment plan based on your income. It allows you to reorganize your debts and create a manageable payment plan over three to five years. If your wages are being garnished, filing for Chapter 13 can stop the garnishment while you work to pay off your debts. You’ll need to propose a repayment plan that the court approves, which can also help you catch up on missed payments.

Another important factor to consider is the type of debt that led to the wage garnishment. Secured debts and certain priority debts (like child support and tax claims) may not be easily dealt with through bankruptcy. Therefore, it is crucial to consult with a qualified bankruptcy attorney to explore your specific situation and options.

After filing for bankruptcy, you may also be required to attend a meeting of creditors, where you’ll have the opportunity to discuss your financial situation. Although most creditors do not attend, it is an essential part of the process. Following the successful completion of your bankruptcy case, many or all of your debts may be discharged, and wage garnishment would stop permanently for unsecured debts.

In conclusion, bankruptcy can indeed provide a lifeline for those experiencing wage garnishment in Tennessee. By stopping the garnishment through the automatic stay, individuals can focus on regaining their financial footing. However, navigating bankruptcy can be complex, so seeking legal assistance from a knowledgeable bankruptcy attorney is crucial to ensure you make the best decisions for your financial future.