07 Jan Chapter 13 Wage Garnishment Is Not Required By Bankruptcy Law
Wage garnishment is not a requirement of the United States Bankruptcy Code for Chapter 13 debtors. I have seen information on some websites implying that wage garnishment is “The” law, and that if you file for Chapter 13 bankruptcy that you are absolutely subject to wage garnishment. This is not true, although it may be required by local rule. It is not the case in the Western District of North Carolina, and is not required in many other areas.
In my division, wage garnishment is not required unless the debtor misses Chapter 13 plan payments. In other areas of North Carolina, wage garnishment is common. Even if garnishment is a requirement, sometimes an attorney can motion to have this rule waived but this may be specific to the area and judges.
People worry about this because they don’t want their employer to know that they filed for bankruptcy. In order to know if garnishment is imposed in your filing district, you should speak to an experienced bankruptcy attorney in your area.
Garnishment does have it’s benefits and many of my clients ask me to request a garnishment be put on them so that the Chapter 13 plan payment is automatically taken from their paychecks. This makes it less likely that they will fall behind in payments, and could increase their chances to successfully finish their Chapter 13 case.
Bankruptcy laws vary greatly from district to district, even though it is a Federal Law. This is just another illustration of why you need to hire an experienced attorney in your area to guide you through the bankruptcy process.
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