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If you have not paid your credit card bills and creditors are taking money from your paycheck each week, you are probably wondering how you can stop them from taking your hard earned wages. A wage garnishment is when a creditor who has a judgment against you, forces your employer to give a portion of your check to pay your debts. Many people who end up with a wage garnishment are already strapped for cash and can’t afford to have money taken out of their checks every week. Filing for bankruptcy is one of the ways to stop a wage garnishment.
How to Stop Garnishment
When you file for bankruptcy the automatic stay goes into effect immediately. The automatic stay stops creditors from collecting from you or contacting you. This means that creditors who have wage garnishments against you, can no longer take the money out of your paycheck once your bankruptcy petitionis filed. You should note, alimony and child support payments will continue to be garnished from your pay even after you file for bankruptcy. If you have filed for bankruptcy within one year of your current filing then the automatic stay will only last for 30 days. If you want to extend the stay, then you will need to ask the Court for permission. If you have filed bankruptcy twice within the last two years the automatic stay will not kick in at all. The Bankruptcy Court implemented this rule to prevent people from filing numerous bankruptcy petitions. If your case gets dismissed or you don’t receive a discharge then your wage garnishment can continue after the bankruptcy filing. The wage garnishment will only stop once your creditor is notified. That is why it is extremely important to make sure that all of your creditors are listed correctly on your petition. Contacting your creditors and letting them know that you have filed for bankruptcy is probably the fastest way to get them to stop the garnishment. You should also notify your employer’s payroll department so that they stop the wage garnishment. Many creditors will ask you for proof of your bankruptcy filing. Make sure to have your case number when you contact the creditor.↑ Back to top
How Go Get Funds Garnished Post-Petition back
If your creditor has garnished your wages after your bankruptcy has been filed even though you called them right away to get the garnishment stopped, then it’s probably a timing problem. Especially if you filed the day before your next payday, there probably simply wasn’t any time. Chances are that payroll was already processed and even if the creditor contacted your employer right away, nothing could have been done to stop it. Make sure you let your employer know about this, and follow up with the creditor to make sure they are issuing a refund. If they are still garnishing your wages after the bankruptcy case is filed, they are violating the automatic stay. Creditors know that the Court can hold them in contempt and fine them for doing this, so they shouldn’t give you any grief about refunding you this money. If they refuse, or continue to garnish your wages, it’s important to let the Court know about this. Hiring a bankruptcy lawyer to hold your creditor liable for violating the automatic stay may be a viable option.↑ Back to top
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How Go Get Funds Garnished Pre-petition Back
In some cases, you may be able to get back some of your garnished wages. If the garnishment occurred 90 days before you filed bankruptcy then you could be entitled to the money they took from your paychecks if you have an exemption you can claim. Consider talking to your trustee about whether they think your bankruptcy estate is entitled to the money instead. If not, you can take action to recover the money. You may consider hiring a lawyer to file a lawsuit against the creditor for you. A lawyer will file an adversary proceeding against the creditor for you. An adversary proceeding is a lawsuit within the bankruptcy. You may need to decide if this is cost-effective. Hiring a lawyer to collect the garnished wages may not be worth it if the cost of doing so exceeds what you can get back. In that case, check if your court has a self help center or talk to a legal aid organization in your area.↑ Back to top
What if My Trustee Says They Will Recover the Garnished Wages?
If you can’t get your garnished wages back the Trustee may get back the money that was garnished. To get back the money from the creditor you will need to show the Court that the payments were taken involuntarily, the money would have been exempt and there was at least $600 or more taken.↑ Back to top
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If your wages are being garnished, filing for bankruptcy is the only way to stop a garnishment unless you have money to cough up to pay your creditor or they’re willing to settle with you. Once your bankruptcy is filed your garnishment will stop and you may be able to get all the money that was garnished from your creditor if it was garnished 90 days before your bankruptcy filing. Having a wage garnishment against you is never easy, especially when you have other living expenses each month. Filing for bankruptcy can eliminate your debt and allow you to start fresh. Upsolve is a non-profit organization that has many tools to help you file for bankruptcy for free if you can’t afford to hire a lawyer.↑ Back to top