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Bankruptcy Law Blog

Thursday, August 20, 2015

Bankruptcy Can Stop Wage Garnishments

Can filing for bankruptcy protect you from having your wages garnished?

Undergoing bankruptcy can be beneficial for individuals whose wages are being garnished. Filing for bankruptcy may help stop a creditor from garnishing your wages and may even enable you to retrieve some of the wages that were garnished prior to bankruptcy proceeding. 

The Automatic Stay

Once an individual files for bankruptcy the automatic stay goes into effect. The automatic stay stops creditors from most actions designed to collect past due amounts. This effectively stops wage garnishments for the duration of the bankruptcy. In cases where the creditor has a valid reason, however, it may ask the court to lift the stay. This happens mostly in cases where the debt is considered non-dischargeable.  Situations that involve non-dischargeable debts that may result in the suspension of an automatic stay include:

• Child support and alimony;
• Tax proceedings; and
• Repaying pension loans.

Most commonly, the automatic stay is suspended in cases of domestic support obligations.

Wage Garnishments After Bankruptcy

The automatic stay may end in one of three ways: when you receive a notice of discharge, when your case is dismissed without a discharge or when the court lifts the stay. If a particular creditor, such as a credit card company, is included in the discharge, your wages can no longer be garnished to collect any outstanding debt. If your case is dismissed without a discharge, however, the creditor can continue to have your wages garnished.

Recovering Wages Garnished Prior to Bankruptcy Filing

When particular conditions are satisfied, you may be able to retrieve some wages that were garnished before you filed for bankruptcy. Typically, you can receive back wages garnished within the 90 days prior to bankruptcy filing if they were over $600 and if you have sufficient exemptions to cover them. Exemptions are often made for items such as a motor vehicle or a wedding ring. It is important to have an experienced attorney in order to negotiate possible recovery of garnished wages. Much will depend on whether you have filed for Chapter 7 or Chapter 13 bankruptcy.

Ensuring That Garnishments Stop in a Timely Fashion

Once you have filed for bankruptcy, you must provide a complete list of creditors to be officially notified. In order to protect yourself from continuing to have your wages garnished, it is necessary to directly inform the payroll department of the company that employs you. It is also important to inform the levying official, usually the local sheriff, of your bankruptcy in order to stop the garnishment process as quickly as possible.

If you are considering filing for bankruptcy, particularly if your wages are presently being garnished, and you have questions, please get in touch with one of the skilled, experienced bankruptcy attorneys at Padgett & Robertson.  We are available for a free consultation in Mobile and Baldwin County at (251) 342-0264.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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| Phone: 251-342-0264

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