How To Stop Wage Garnishment Or Foreclosure With Bankruptcy In Ohio

If you are living and working in Ohio and are finding that your cost of living and debt keep increasing while your available funds are decreasing, it could become difficult if not impossible to keep up with important payments, like your mortgage. Besides staring down the prospect of foreclosure, you may already have creditors garnishing your precious wages. 

The situation can feel hopeless, but there is real help available in the form of filing for chapter 7 or chapter 13 bankruptcy in Ohio. Your friendly Ohio bankruptcy lawyers at Hausen Law are here to help, with everything you need to know about how this federally-provided legal tool can help you to regain financial footing, stop foreclosure and wage garnishment, and even repair your credit.

Wage Garnishment And Bankruptcy In Ohio

What is wage garnishment? It is a legal process that allows creditors to collect certain debts directly from your paycheck. These debts can include things like:

• Credit card judgments
• Medical debt
• Personal loans
• Certain court judgments

The above debts are typically able to be discharged or worked into a repayment plan when you file for bankruptcy in Ohio. However, some debts that may also result in wage garnishment cannot be cleared. These can include:

• Child support
• Alimony
• Tax obligations
• Student loans
• Criminal fines

Whether you are being threatened with wage garnishment or if your wages are already being garnished, is it not too late to file bankruptcy to put a stop to it. As soon as we file for bankruptcy on your behalf, the automatic stay goes into effect, which halts all collection activities–like wage garnishment–and any other aggressive tactics that creditors may be using against you. The resulting immediate relief and protection of your assets is a vital first step to working out your bankruptcy case and finding the best way forward. 

Foreclosure And Bankruptcy In Ohio

Foreclosure is a legal process that allows a lender to seize a property because the borrower stopped making mortgage payments. Your home acts as your collateral for your home loan, so if you stop making payments due to financial overwhelm from mounting debt, your mortgage lender can legally take ownership and sell your house to recover the unpaid balance. 

If you have reached the point of being threatened with foreclosure, then you are already likely 3 months or so behind on payments, and may have been served with a missed payment notice, or even a formal Notice of Default (NOD). At this point, foreclosure is imminent. To stop the process in its tracks, you will need to work with an Ohio bankruptcy lawyer to file your bankruptcy case which immediately invokes the automatic stay. 

How Chapter 7 Bankruptcy Helps

When you work with an Ohio bankruptcy lawyer to file for chapter 7 bankruptcy, the automatic stay immediately delays foreclosure proceedings. Since the state of Ohio has an exemption in place for a debtor’s home–up to $182,625 for individual filers–along with exemptions for other key assets, it is possible to resolve past due debt and move forward without losing your home. This will involve finding a way to get completely current on past-due payments or work out a loan modification with your lender. Your Ohio bankruptcy lawyer can help you with this.

The automatic stay could last for anywhere from three to four months, in which time your Ohio bankruptcy lawyer will be working with you, the trustee, and the court to iron out a solid liquidation plan. Any non-exempt assets will be sold to help pay down debt. Once the chapter 7 bankruptcy process is complete, you will be in a better place financially and it will then be up to you to continue with regular mortgage payments going forward. This will help to prevent future foreclosure efforts.

We must mention that a lender has the right to file a motion with the court to lift the automatic stay. If granted, they have the right to proceed with the foreclosure. Working with an experienced bankruptcy attorney helps to ensure the best outcome possible in your case.

When it comes to wage garnishment, chapter 7 bankruptcy stops collection and can, depending on the type of debt you have, discharge that debt. Your Ohio bankruptcy lawyers and bankruptcy trustee can negotiate with creditors and liquidate any non-exempt property to pay down debt. In cases where the debtor does not have assets, it becomes a "no-asset case" and most debts are still legally wiped out.

How Chapter 13 Bankruptcy Helps

Filing for a chapter 13 bankruptcy in Ohio also immediately halts foreclosure and wage garnishment, but the end result is different. Those who are eligible for a chapter 7 filing must meet the means test, which determines whether or not a debtor has available income to pay down debt. If your income level puts you over the threshold, then you are able to file chapter 13 bankruptcy. 

This provision can allow eligible homeowners to repay past-due mortgage payments through a court-approved repayment plan. At the same time, they must continue to make current mortgage payments to help prevent future foreclosure attempts. 

In the case of wage garnishment, a chapter 13 bankruptcy filing will temporarily stop your assets from being taken from you. In the meantime, you will work with the trustee and your bankruptcy attorney to set up a repayment plan that takes past due debts into account for those that can legally be negotiated. The repayment plan will last for 3 to 5 years. In the meantime, it is up to you, the debtor, to stay up-to-date with all debts going forward. Our credit counseling and credit repair programs can help you to better manage your finances and regain financial stability.

Your Trusted Ohio Bankruptcy Lawyers

Whatever your story, when debts loom large and you’re facing wage garnishment and foreclosure, your situation can feel overwhelming. But a chapter 7 or chapter 13 bankruptcy may provide the legal tools you need to help stop certain collection actions and create an opportunity to regain financial stability.

Every financial situation is unique, so speaking with a qualified bankruptcy attorney is your best bet to understanding your rights and determining the right path forward. Contact our team to schedule a confidential consultation and discuss your bankruptcy options with an experienced Ohio bankruptcy lawyer. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation or to inquire about our credit counseling and credit repair programs.