How to Protect Your Paycheck & Stop Garnishments with Bankruptcy
Our experienced bankruptcy attorneys understand that nothing is worse than putting in a long, hard work week – only to have a big chunk of your hard earned wages garnished. If a creditor is garnishing your paycheck, you should be able to stop the garnishment (with a few exceptions) by filing bankruptcy! And, in some cases, you may even be able to get some of your garnished wages back – if you file bankruptcy right away.
How an Automatic Stay in Bankruptcy Stops Garnishments
When you file bankruptcy, something called an “automatic stay” goes into effect that prohibits almost all further collection attempts by creditors. This “automatic stay” also stops wage garnishments.
Once the “stay” is in place a creditor can only resume collection actions, if it petitions to court to lift the stay and the judge approves it. The judge will only lift a stay if the creditor can satisfactorily demonstrate that they have a valid reason for having the stay lifted. The “valid reason” has to be more compelling than simply wishing to resume a wage garnishment.
Exceptions to The Automatic Stay
There are a few exceptions to the automatic stay, however. The stay does not stop garnishments for domestic support obligations – including child support or spousal support (alimony).
How Long Does a Bankruptcy Automatic Stay Stop Garnishments?
The automatic stay will stay in effect until one of these things happens:
- You receive a discharge; or
- Your case is dismissed without a discharge; or
- The court lifts the stay.
Can I Get Back Wages that were Garnished Before I Filed Bankruptcy?
If certain specific conditions are met, you may be able to get back some of the wages that were garnished before you filed bankruptcy.
Generally you can get back wages garnished before the bankruptcy if:
- the wages were garnished within the 90-day prior to your bankruptcy filing; and
- if the garnished wages were over $600 total; and
- you have enough “exemptions” to cover them.*
(*Note: “exemptions” are complicated and should be discussed with an experienced bankruptcy attorney. Call us if you wish to discuss your exemptions.)
If you meet a 3 requirements, your bankruptcy attorney can file a complaint asking that the creditor be ordered to return the garnished wages.
Notify Your Employer of your Bankruptcy to Stop Garnishments
You are required to list all your creditors when you file bankruptcy – so they can be put on notice to stop all collection activity. But sometimes a creditor does not get the notice in time to stop the garnishment in time. For this reason it is important to also notify the payroll department of your company that you have filed bankruptcy – so they do not honor any further garnishments that may come in after the bankruptcy was filed.
Best Southfield Bankruptcy Attorneys
If your wages are being garnished, call our experienced bankruptcy attorneys right away. We will offer you a FREE consultation to evaluate your situation, and help you determine if filing bankruptcy is the best option to stop your garnishments.
We have helped hundreds of individuals in Macomb, Oakland and Wayne County stop their paychecks from being garnished. We can help you, too.