Will Bankruptcy Stop My Wage Garnishment?

Photo by Pixabay from Pexels

If you’re struggling with debt, there’s a chance that you’re dealing with one or more creditors garnishing your wages. You might be wondering if there’s a way to stop the wage garnishment. The answer is yes, but there are multiple approaches to take. One of them involves filing for bankruptcy.

What Is Wage Garnishment?

Wage garnishment occurs when an employer withholds a portion of an employee’s paycheck then sends that money to a creditor. Most wage garnishments are the result of a court judgment in the creditor’s favor.

Some rules limit how much money can be garnished from a paycheck. Wage garnishments that are the result of consumer debts are usually limited to 25% of the borrower’s take-home pay or 30 times the federal minimum wage. But if the garnishment is the result of back child support, the amount can be as high as 60% of take-home pay.

How Does Bankruptcy Stop a Creditor from Garnishing My Wages?

The primary means by which bankruptcy will stop your wage garnishment is through the automatic stay. An automatic stay is a temporary pause on most debt collection activities.

The automatic stay can stay in effect for the duration of the bankruptcy proceedings. But it can be as short as 30 days if you filed for bankruptcy in the past year and the bankruptcy court dismissed your case. But in rare situations, you won’t be eligible for the automatic stay, such as having your third bankruptcy filing in the past year.

The automatic stay won’t affect all wage garnishments, such as those arising out of domestic support obligations. These include debts relating to past child or spousal support. If you want to stop wage garnishments arising from domestic support debts, you’ll need to go to your local court and ask the judge to modify the child or spousal support order.

The automatic stay stopping wage garnishments is only temporary. But if you file for Chapter 7 bankruptcy and end up getting some of your debts discharged, any wage garnishments resulting from those debts will permanently cease.

Considering Bankruptcy to Stop Your Wage Garnishment?

The above is just a brief overview of how bankruptcy can help you if your wages are getting garnished and other details can make a difference. For example, in certain situations, filing for Chapter 13 bankruptcy instead of Chapter 7 can temporarily stop wage garnishments that are the result of domestic support obligations. To find out how that works, or ask any other questions you might have about stopping wage garnishment, get in touch with a Tuscaloosa bankruptcy lawyer or a bankruptcy attorney in your city.

SEE ALSO: Income Driven Repayment Plan: Is It a Good Idea?