In Massachusetts, filing for bankruptcy can stop creditor harassment and wage garnishments. If you’re dealing with creditors hassling you or having your wages garnished, you’re probably looking for relief. Bankruptcy restricts most creditors from contacting you while the automatic stay is in effect. It can help you get your debt under control and find a new path forward.
What Is Bankruptcy in Massachusetts?
Bankruptcy is a legal process that helps Americans who are in debt. To start a bankruptcy, you make a filing in court. The filing asks the court to help you assess your financial situation, pay off creditors to the extent possible, and discharge remaining debts. Discharging debts means you no longer owe them in the future, and creditors can’t pursue you for their payment. As part of the bankruptcy process, you’ll also need to attend a credit counseling course before you file and a debtor education course after you file your case.
The Bankruptcy Automatic Stay
Shortly after you file for bankruptcy, the court will place an “automatic stay” in place. The automatic stay order acts as a “stop creditor harassment” order. It requires most creditors to stop their efforts to collect debts from you, including collections, lawsuits, wage garnishments, and bank levies. The order gives you breathing room to work with the court on sorting out your financial situation. If you filed a Chapter 7 bankruptcy, the trustee will determine whether you have any non-exempt assets to sell (but many assets can be protected by bankruptcy exemptions). If you filed a Chapter 13 bankruptcy, the court will determine a fair payment plan that you must follow. If you filed a business bankruptcy, there are other steps you may need to follow. In any case, the automatic stay prevents creditors from bothering you while you go through the bankruptcy process.
Harassment: When Creditors Violate the Automatic Stay
Some creditors may still attempt to contact you during the automatic stay period. If you hear from a creditor, tell them that you have filed for bankruptcy, give them your case number, and give them your bankruptcy lawyer’s contact information. Once they learn that you have filed for bankruptcy, they should not contact you again. If they do, you may have further legal recourse, such as pursuing penalties and damages from the offending creditors.
In a few specific cases, some creditors are allowed to continue collections on debts such as state child support and student loans. These types of debt are carved out from the automatic stay and other bankruptcy laws. Talk to your bankruptcy lawyer about handling payments on these types of debts and about managing creditor outreach.
The most important takeaway here is that bankruptcy can effectively stop creditor harassment and wage garnishments through the automatic stay. Further down the road, you can obtain a discharge of some or all of your debts. After the court discharges a debt, the creditor cannot pursue you further for payment. The slate gets wiped clean, and you get to start over.
Frequently Asked Questions
A creditor has levied on my bank account to pay back a debt. How can you help?
Like wage garnishments and other collection efforts, bank levies must stop when the automatic stay is in place during bankruptcy. Please give our firm a call if you are in this situation, and we can discuss whether it makes sense to file for bankruptcy and stop further bank levies.
I’ve received a notice of sale for my home, which is in foreclosure. What should I do?
If your foreclosed house is up for sale, you need to act quickly. An emergency bankruptcy filing can act to stop the sale once the automatic stay is in place. But once the sale occurs, you’re out of luck. As soon as you learn of a notice of sale, get a bankruptcy attorney to help you take your next steps.
Need Debt Advice in Massachusetts? Call Us
Are you looking for a dependable, experienced lawyer who can assist you with stopping collections on debts? Daigle Law Office’s attorneys can provide you with experienced Massachusetts bankruptcy help. Dealing with financial problems isn’t easy, and it’s frustrating when creditors hassle you or garnish your wages. Daigle Law Office helps clients dealing with tough situations who need solid, reliable legal advice. To schedule a consultation, call 508-771-7444 or use our convenient Contact Form.
