Right Legal Guidance About the Ways to Stop Wage Garnishment in Bankruptcy in Arizona

If you find yourself struggling with wage garnishment issues in Arizona, Phoenix Fresh Start Bankruptcy Attorneys is here to help. We will guide you through the process and we will explore five effective ways to stop wage garnishment in bankruptcy, providing you with the knowledge and guidance necessary to reclaim your financial freedom.

At Phoenix Fresh Start Bankruptcy Attorneys, we understand the toll wage garnishment can take on your financial well-being. Our dedicated team of legal professionals is committed to assisting clients like you in overcoming these challenges and obtaining a fresh financial start. 

Whether you are burdened with mounting debts, facing creditor harassment, or struggling to make ends meet, we have the skills to guide you through the complexities of bankruptcy law. Don’t let wage garnishment control your life any longer. Take the first step towards financial stability and contact Phoenix Fresh Start Bankruptcy Attorneys today. 

Contact us now to schedule a free, no-obligation, stress-free financial analysis and discover how we can assist you in finding relief from the burden of wage garnishment.

What Constitutes Garnishment?

Garnishment is a legal process used by creditors to collect a debt owed to them. Instead of directly collecting money from the debtor, garnishment involves targeting a third party who holds the debtor’s assets. This third party could be a bank, employer, or another individual who owes the debtor money.

Although garnishment can extend beyond money and include other personal property, it is less common for a couple of reasons. First, garnishment requires personal property to be in the possession of someone other than the debtor, which is not a common scenario. The most frequently garnished types of personal property are stocks, bonds, or similar financial instruments.

Second, if any non-monetary property is garnished, it needs to be sold by the sheriff before the creditor can receive payment. Since this involves additional steps and complications, most creditors prefer to pursue money if it is available. 

What Are the Five Effective Ways to Stop Wage Garnishment in Bankruptcy?

Stopping wage garnishment is a common concern for individuals facing financial hardships and considering bankruptcy as a solution. Filing for bankruptcy can provide relief from wage garnishment, as it triggers an automatic stay that puts a halt to most collection activities, including garnishments.

There are several ways to stop wage garnishment in bankruptcy, such as:

1. Avoid Having a Judgment Entered Against You

The most effective way to halt a garnishment is to prevent a judgment from being entered against you in the first place. This means that you should not disregard lawsuits that have been filed against you. 

If you receive any documents that appear to be from a court or mention terms like “complaint,” “summons,” or “judgment,” it indicates that there is likely a lawsuit in progress against you. In such cases, it is crucial to seek immediate legal advice and determine how to address the lawsuit. 

Generally, your options may involve either contesting the lawsuit through litigation, reaching a settlement, or resolving the matter through bankruptcy. Taking proactive steps in handling lawsuits is particularly important because it allows you the most time to develop the best strategy and make necessary arrangements to safeguard your assets. 

Often, individuals tend to ignore lawsuits until they receive a garnishment order. However, at that stage, there are fewer available options to stop the garnishment, and the timeframes become significantly shorter. You might have less than two weeks to prevent the garnishment from taking effect.

2. Do Not Subject Assets to Garnishment

If you find yourself facing a judgment that cannot be set aside, it becomes crucial to consider strategies to limit the impact of the garnishment. One approach is to take steps to restrict what the garnishment can reach. 

For instance, if the garnishment specifically targets bank accounts at a particular bank, you can limit its effect by refraining from depositing money into those specific accounts. It’s important to note that once the bank receives the garnishment order, they will withhold funds accordingly. 

Therefore, to make this strategy effective, you need to start planning how to protect your money as soon as you become aware of the potential for garnishment and before the garnishment application is filed. In other words, this planning should commence as soon as you learn about the lawsuit against you. 

3. Reduce the Amount Being Garnished

If you’re facing wage garnishment and have exhausted all options to stop it, there is still a possibility to request a reduction in the garnished amount. You can do this by submitting a request for a hearing to the court using the form provided with the garnishment documents. 

During the hearing, you will need to demonstrate that a garnishment of 25% of your disposable income would cause extreme economic hardship for you or your family. In such cases, the court has the authority to lower the garnishment to 15% of your disposable income. 

This reduction can provide some relief in managing your financial obligations while mitigating the impact on your overall economic well-being.

4. Settlement

Settlement is an option that remains available to you for resolving any type of debt. Essentially, it involves negotiating a voluntary payment arrangement with your creditor. Typically, the most favorable settlement terms can be reached before a judgment is entered against you. 

Once a judgment is obtained, the creditor is generally less inclined to reduce the debt as significantly as before. Moreover, if a wage garnishment is already in effect, the creditor may be even more reluctant to reduce the overall debt amount. 

However, it’s important to note that even with a garnishment in place, the creditor will usually still be open to the possibility of a settlement, unless they can collect the entire debt through a lump sum garnishment. There are two key reasons for this: 

  • First, by agreeing to a settlement, the creditor receives payment sooner compared to the time it would take to collect the debt through garnishment, which can often span several months or even years. Moreover, the creditor cannot be certain that you will remain employed with the same employer throughout that entire period.

  • Second, the creditor always faces the risk that you may file for bankruptcy to discharge your debt. In such a scenario, the creditor is likely to receive little or nothing at all.

5. File a Bankruptcy

Filing for bankruptcy serves as a powerful measure to prevent most garnishments from taking effect and halt ongoing garnishments. Additionally, it offers the opportunity to eliminate a wide range of unsecured debts, including many types of judgments. 

As a result, bankruptcy proves to be an effective tool for both avoiding or immediately stopping a garnishment and addressing the underlying debt simultaneously. In comparison to other discussed options, bankruptcy can lead to substantial cost savings.

Another notable advantage of bankruptcy is its ability to help you recover money that was garnished within three months before filing for bankruptcy. This particular benefit is typically achieved through a Chapter 13 bankruptcy. It can prove especially beneficial if a significant lump sum was unexpectedly garnished, such as a substantial amount taken from your bank account. 

However, it’s important to understand that bankruptcy is a significant legal step, and it requires careful evaluation of its benefits and costs with the assistance of our skilled bankruptcy lawyer in Phoenix. Considering bankruptcy as an option may be appropriate if:

  • You currently have an irrevocable judgment against you that cannot be overturned
  • You are burdened with multiple debts
  • The total amount of your debts exceeds $10,000
  • You lack the necessary financial means to settle your debts
  • A substantial sum of money was garnished from you within the past three months

We Can Answer Your Questions About Ways to Stop Wage Garnishment in Bankruptcy

Escaping the clutches of wage garnishment can feel like an uphill battle, but with the assistance of a skilled bankruptcy lawyer, you can find the relief you seek. Phoenix Fresh Start Bankruptcy Attorneys has established itself as a trusted partner in navigating the complexities of bankruptcy law. 

With our unwavering commitment to client success and extensive knowledge of the legal landscape, we can provide the guidance and support necessary to help you regain control over your finances. Phoenix Fresh Start Bankruptcy Attorneys will work diligently to halt wage garnishment through the power of bankruptcy. 

With our proven track record of success and our dedication to client satisfaction, you can trust us to provide the personalized solutions you need to regain control of your finances. Our competent legal team can also assist you with Automatic Stay, Bankruptcy Exemptions, Types of Bankruptcy, and Rebuilding Credit After Bankruptcy.

Take that vital step towards a fresh start and a debt-free future by partnering with Phoenix Fresh Start Bankruptcy Attorneys today.