If you can't pay your debts, wage garnishment can help your creditors get some or all of their money back. However, it can also bring about additional financial hardship if you're already struggling. If you have been sued, you may wonder, "Does bankruptcy stop wage garnishment?"
Can Bankruptcy Stop Wage Garnishment?
When you file for bankruptcy, an automatic stay prevents most creditors from taking any further actions to collect debts. This prevents them from making wage garnishments, collecting other debts, or even wiping out the debt itself.
Although an automatic stay can be very powerful, it can also be temporary. For instance, it can only be put in place for 30 days after you file for bankruptcy. Many people considering bankruptcy want to know, "Does Chapter 13 stop garnishments?" Others may wonder, "Does Chapter 7 stop garnishments?". In many cases, filing for bankruptcy will stop a garnishment. However, there are cases where it will not.
Does Chapter 7 stop garnishments?
When you file for a Chapter 7 bankruptcy case, wage garnishment won't be stopped if the debt was from alimony, past-due child support payments, or other types of domestic support obligations.
Does Chapter 13 stop garnishments?
In most cases, filing for Chapter 13 bankruptcy will stop wage garnishments on all debts, including those related to domestic support obligations. However, this type of bankruptcy requires that you pay these obligations over a certain period. So, while a wage garnishment may still be made, it will stop once chapter 13 is active.
How to File Bankruptcy to Stop Wage Garnishment
Now that you know the answer to the question, “does bankruptcy stop wage garnishment?" it's time to start the process. Here’s how to file bankruptcy to stop wage garnishment.
1. File Bankruptcy Petition
Once you file a bankruptcy petition, wage garnishments will stop immediately. However, you should give your creditors enough time to provide you with the necessary paperwork to make the stop. If your case is filed before your next payday, wage garnishment might still be issued. However, you'll get the money back once the payroll has been processed.
2. Call Creditor's Attorney
You should contact the attorney who sued you. Tell them that you have filed for bankruptcy, and tell them that the automatic stay will protect you from wage-related actions in the future.
3. Let Your Employer Know
Although some companies can stop wage garnishments immediately after learning that a bankruptcy case has been filed, others still wait for the court to confirm the order that was entered in the first place.
4. Follow Up With Your Employer
If you're still not sure that the wage-related actions have been stopped, don't wait until the next payday to confirm it. Instead, contact your payroll department and make sure that the creditor's attorney is aware of the status of your efforts. You should also regularly remind them that it's their job to make sure that the wage-related actions are stopped.
