Bankruptcy FAQ’s

Will filing bankruptcy stop a wage garnishment?   

Yes, it can. Bankruptcy will need to be filed with the courts and then an automatic stay will be granted preventing further garnishment of wages. If any garnishment that is in place at the time you file for bankruptcy deducts funds from your check, those funds must be refunded to you.

Can bankruptcy stop a foreclosure?

Yes. Filing bankruptcy can bring foreclosure proceedings to a halt immediately and end collection calls. It can give you time to make up some payments and reorganize your finances. In some cases, bankruptcy can help borrowers save their homes permanently.

Can bankruptcy stop my car from being repossessed?

Yes. If the lender has not repossessed your car when you file for bankruptcy, an automatic stay will be issued preventing the lender from repossessing your vehicle until the bankruptcy court approves your repayment plan. If your car has already been repossessed, filing bankruptcy can allow you to get the car back, but you must act quickly.

Can bankruptcy stop a bank levies?

Filing for bankruptcy protection will end bank levies. Recent levies of funds may also be returned to you. Immediate action will prevent further funds from being taken from your account.

Can bankruptcy stop collections on my student loans?

Except for unusual circumstances, student loans are not dischargeable through bankruptcy. If you are considering filing and student loans make up most of your debt, we recommend researching all your options to find the best solution for your situation. Although student loans may not be discharged, bankruptcy can stop student loan collection activities and give you time to get back on your feet.

Can bankruptcy stop IRS collections and back-taxes?

Filing for bankruptcy protection will temporarily stay the collection of back taxes owed to the IRS. Most tax debts are not dischargeable and will be considered priority debts. You will be required to make the payments once the bankruptcy stay has been lifted. There are exceptions based on the time frame when the debt was incurred and often penalties can be reduced if your tax payments become an approved part of your bankruptcy repayment plan. One myth about IRS taxes is that you can never discharge them in bankruptcy. Actually, IRS taxes assessed on tax returns more than 3 years ago may be discharged.