How Garnishments Work
A garnishment is a court order requiring an employer or a financial institution to withhold a set amount of money and send it to the person or institution named in the order. Garnishments for certain types of debts are issued automatically.
Generally, a creditor must file and win a lawsuit against you and get a court order requiring you to pay the debt. With this court order in hand, the creditor can seek a wage or bank account garnishment. Although there are legal limits on how much may be taken to satisfy particular debts, the strain on an individual's finances could be significant.
How bankruptcy Can Help
The moment a debtor files for bankruptcy, the automatic stay goes into effect. The automatic stay stops most types of debt collection efforts immediately, including garnishments. By stopping all debt collection activity, the automatic stay gives debtors a bit of a break from the financial crisis that drove them to bankruptcy.
If the debt that led to the garnishment will be wiped out in bankruptcy, filing for bankruptcy will stop the garnishment permanently. Many times, the debts are for credit cards, medical bills, and court judgments. The automatic stay will stop these garnishments and, because of the dischargeable nature of these debts, filing for bankruptcy truly gives that individual a fresh start. Those who file for Chapter 7 bankruptcy can get these debts discharged at the end of their case; Chapter 13 filers can include these debts in their repayment plan, rather than facing garnishments.
However, not all debts may be discharged. For some of these debts, including back taxes, filing for bankruptcy will temporarily stop collection efforts, including through wage garnishment. Once the bankruptcy case is over, however, you will still owe these debts -- and the automatic stay will no longer protect you from efforts to collect them. If you owe child support, filing for bankruptcy won't affect an existing wage garnishment. And, because child support obligations aren't wiped out in bankruptcy, the garnishment will continue before, during, and after a bankruptcy case, just as if you had never filed for bankruptcy.
If you have been garnished and you are facing mounting debt, filing for bankruptcy may be a good choice. If you need help, we are experienced bankruptcy counsel who will review your options and advise you on whether bankruptcy may be in your best interest.