Wage Garnishment

A garnishment is effectively a court order which tells your employer to pay a portion of your paycheck to the creditor instead of to you. Except in rare circumstances, a creditor can’t get that garnishment order without first suing you and getting a judgment saying that you owe the debt. A judgment is the court’s decision that you do indeed owe the debt, how much you owe, and the amount of any additional costs. A judgment authorizes a creditor to use a variety of powerful ways to get money or property out of you to pay the debt, often (but not always) including through wage garnishment.

Filing bankruptcy stops a wage garnishment from hitting your paycheck as long as it is filed fast enough.

Filing bankruptcy virtually always stops a garnishment by making it illegal for your creditor to keep collecting the debt. 

Filing either a Chapter 7 or Chapter 13 bankruptcy imposes an “automatic stay” on your creditors. The “automatic stay” is a fancy legal term but it just means that creditors are not allowed to pursue further collection of almost all your debts. (Some rare exceptions are criminal fines and restitution, and most child and spousal support.) This stopping of debt collection goes into effect the moment you file bankruptcy.

In particular, the automatic stay stops “the commencement or continuation” of a lawsuit against you on a debt. Section 362(a)(1) of the U.S. Bankruptcy Code. That means that once you file bankruptcy, creditors can’t start a lawsuit against you and a lawsuit that a creditor already filed can’t continue.

In addition to preventing upcoming wage garnishments, bankruptcy typically prevents wage garnishments permanently for the vast majority of debts. Bankruptcy causes most debts to be discharged (legally written off). Once a debt is discharged, an injunction is imposed against the collection of that debt ever again. That includes collection by any means, including garnishment. Section 524(a)(2) of the Bankruptcy Code. So the bankruptcy filing prevents wage garnishment on most debts, forever.

There are some rare situations when wage garnishment is only prevented temporarily. There are also some very limited situations when a wage garnishment is not prevented at all. 

To find out more about the legal options available to you in your unique situation, contact one of our attorneys and we will be happy to advise you.