Wage garnishment can be a severe financial blow, leaving individuals struggling to make ends meet while dealing with mounting debts. In Wisconsin, Chapter 128 offers residents an alternative to bankruptcy, providing a potential solution to halt wage garnishment and reorganize their finances. In this blog post, we'll explore whether Chapter 128 can indeed stop wage garnishment and how it may offer relief to those facing this challenging situation.
Understanding Wage Garnishment
Wage garnishment is a legal process through which creditors can collect unpaid debts by deducting a portion of an individual's wages directly from their paycheck. This deduction continues until the debt is satisfied or a court order terminates the garnishment. It is essential to note that certain debts, such as child support and federal student loans, can lead to wage garnishment without the need for a court order.
Chapter 128 and Wage Garnishment
Chapter 128, also known as the Wisconsin wage earner's plan, allows individuals who are residents of the state to create a repayment plan to manage their debts effectively. One of the significant advantages of Chapter 128 is that it can potentially stop wage garnishment proceedings.
Automatic Stay Protection
Upon filing for Chapter 128, an automatic stay is triggered, providing immediate relief from creditors' collection efforts, including wage garnishment. The automatic stay legally prohibits creditors from continuing or initiating any wage garnishments while the Chapter 128 case is pending.
However, it's crucial to note that certain exceptions exist, and the automatic stay may not apply in all circumstances. For example, if your wages are being garnished for child support or alimony, Chapter 128 may not stop the garnishment.
Creating a Repayment Plan
Once the Chapter 128 petition is filed and the automatic stay is in place, the debtor, with the help of their attorney, must develop a feasible repayment plan. The plan outlines how the debtor will repay their debts over time, within a three-year period.
The repayment plan will be reviewed by a trustee and, if approved by the court, becomes legally binding. It will provide a structured path for repaying debts and may offer an opportunity to catch up on missed payments, stop wage garnishment, and alleviate financial burdens.
For Wisconsin residents facing wage garnishment and overwhelming debts, Chapter 128 can provide a lifeline to regain control of their financial situation. By initiating an automatic stay and creating a court-approved repayment plan, individuals can halt wage garnishment proceedings and work towards settling their debts over time.
However, it's important to understand that Chapter 128 may not be the best solution for everyone, and specific debts, such as child support or alimony, may not be affected by the automatic stay. Therefore, consulting with a knowledgeable attorney is crucial to determine the most appropriate course of action based on individual circumstances.
As financial laws and regulations are subject to change, individuals seeking relief through Chapter 128 should always consult a legal professional for the most up-to-date and accurate advice.