6 Steps To Stop Wage Garnishment After Filing Bankruptcy

Step 1: File Your Bankruptcy Petition

Wage garnishments have to stop immediately once your case is filed but you should allow time for the creditor to provide your employer with the necessary paperwork to actually cause the stop. If your case is filed the day before your next payday, chances are you're paycheck will still be garnished, as the payroll has already been processed. However, you'll get that money back.

Step 2: Call the Creditor's Attorney

 Call the attorney that sued you on behalf of your creditor. Tell them that you've filed bankruptcy and give them your case number. Let them know that the automatic stay protects you from any future wage garnishment. This puts the ball in their court to take the steps necessary to make sure you're not garnished again going forward. Make sure you have the case number from the lawsuit handy when you call them, so they can look up your file easily. You can find the case number in part 4 of your Statement of Financial Affairs (Form 107).

Step 3: Call the Creditor that Sued You

Call the creditor that sued you and is garnishing your wages. You can skip this step if you'd like. The most important part of this process so far is Step (2). Once the attorney knows, the burden to make the garnishment stop is on them. 

Step 4: Let the Sheriff's Office Know (if they're involved)

If your wage garnishment involved the sheriff's office, make sure you notify them about your filing and provide them with your bankruptcy case number. 

Step 5: Let Your Employer or Payroll Company Know

Keep in mind, however, that they're processing the garnishment based on a state court order telling them to do so. While some employers are able to put an end to the garnishment as soon as they are aware a bankruptcy case has been filed, many wait until they get official word from the court that entered the garnishment order in the first place.

This makes sense, as they don't want to run afoul any state court orders, but it means that you'll need to stay on top of them and the creditor's attorney to make sure they get the stop order from the state court quickly enough to stop the garnishment before your next payday.

Step 6: Follow Up With Your Employer/Payroll Department

Don't wait until the next payday to check the status to confirm that the garnishment has been stopped. Instead, keep in close contact with someone in your payroll department and - if they're not hearing from the creditor's attorney - follow up with the creditor's attorney again. It's their job to make sure your garnishment stops. Don't be afraid to call and remind them of that if it seems like they're dragging their feet.

Let's Summarize...

While this may sound like a scary process, you're mostly acting as the middle man, making sure that everyone is on the same page and is doing what they need to, so your next paycheck is not garnished again. Ultimately, if the creditor fails to take the necessary steps to stop the garnishment, you can ask the bankruptcy court to sanction them. The creditors - and their attorneys - know this and generally don't want to get called into court to explain their actions.