Does a Chapter 7 Claim Absolve a Wage Judgment Against a Claimant?
- It takes time and money for a creditor to get a judgment against a debtor, which is why a creditor usually doesn't get a judgment unless a debtor is seriously delinquent. No one can define the precise trigger that makes a creditor decide to take a case to court, but eventually, if you simply stop paying the debts you owe, your creditors may take that step. A judgment is the determination of a court that you are indeed responsible for the debt your creditors are trying to collect. Additionally, a judgment gives your creditors the legal backing of the court system to retrieve money from you, often in the form of a wage garnishment. Once a judgment for wage garnishment is entered against you, your remaining options are generally limited to payment or bankruptcy.
- You can get immediate relief from a wage judgment against you simply by filing bankruptcy. Long before the court has the chance to review your case and determine whether you should receive a discharge, the court notifies all of your creditors that you are to remain untouched. You should receive no letters or phone calls from your creditors once you file bankruptcy, and any wage garnishments in effect should immediately stop. This immediate protection is known as the automatic stay.
- While the automatic stay can provide needed temporary relief from a wage judgment, it does not fully resolve your problem. If for any reason your bankruptcy case falls through, the wage judgment remains in effect. Only if you see your bankruptcy case through to the conclusion of a bankruptcy discharge can you totally absolve a wage judgment against you. As long as the debt underlying the wage garnishment is discharged in your bankruptcy case, as most debts are, your creditor can no longer enforce the judgment against you.
- The final step in removing any type of judgment against you after bankruptcy is the formal act of vacating the judgment. While the automatic stay protects you against the wage judgment, and the bankruptcy discharge removes your obligation to continue paying, you must also file formal paperwork with the court system to remove the judgment against you. When the court that issues the judgment sees evidence of your discharge, the court will vacate the judgment against you, rendering it formally invalid. This is usually a simple administrative step.