If you’re struggling enough already that creditors are seeking judgment against you – the last thing you need is a short paycheck.
Here’s some good news: filing bankruptcy stops wage garnishment.
Once you file your bankruptcy case, creditors are no longer allowed to garnish your wages for any debts that existed on the day you filed. The only exception to this might be for ongoing child support.
The automatic stay requires every creditor to stop collection efforts against you, including the IRS. If creditors violate this stay, they can be subject to sanctions by the court, which tend to be very expensive.
Getting your wages back
Under certain circumstances, the bankruptcy code enables you to recover any wages that were garnished within 90 days of your bankruptcy filing.
You must have exemptions available to you to protect the money that you recover.
Sometimes creditors will voluntarily return the wages garnished during that 90 day period, and others will wait until the court orders them to do so.
Discharge protects your future wages against past debts
Once the court issues your bankruptcy discharge, your creditor will never again be able to garnish your wages for that particular debt.
Note that the discharge does not protect you from wage garnishment for any debts that were either non-dischargeable in the bankruptcy or entered into after the bankruptcy was filed.
Hesitating to act could cost you more.
If you wait to file until right before payday, the bankruptcy won’t necessarily protect what you earned during that pay period from your creditor.
Therefore, the sooner you act, the more of your wages you can protect.
Also, check into any state laws that might help you protect your wages while considering bankruptcy.
I just got the garnishment notice. What do I do?
Talk to an experienced bankruptcy attorney who can help you take action as fast as possible to preserve your paychecks. It’s free to chat with me about your options – you can call or text me at 215.551.7109, or drop me a line.