Stopping Wage Garnishments and Getting Your Money Back

Using Bankruptcy to Stop Wage Garnishments and Get Your Money Back

Bankruptcy can help you stop a wage garnishment. It can even help you get your money back if a levy or garnishment has already started. 

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First Things First: Does the Creditor Have a Judgment?

But, let’s back up a bit.

Keep in mind, a debt buyer or creditor usually must sue you and get a judgment against you before it can pursue a garnishment, bank levy, or lien. [Exceptions:  some taxing authorities, child support enforcement agencies, and student loan creditors do not need to get judgments before they can garnish, levy, or file a lien on your assets.]

But, sometimes creditors or debt buyers will threaten you with garnishments, bank account seizure, and liens  even when they do not have a judgment against you.  These threats are usually a violation of federal and state debt collection laws.  You should contact an attorney if a debt buyer or creditor has threatened you in this way.

But, suppose the debt buyer or creditor has a valid judgment against you.   And, they are garnishing your wages.

The Automatic Stay

When you file bankruptcy, a court order called an automatic stay goes into effect. This court order stops most collection activities by creditors, including wage garnishments. The wage garnishment stops as of your bankruptcy case filing date.

If you successfully complete your bankruptcy and receive a discharge, the debt that gave rise to the wage garnishment is likely to be wiped out by the discharge. If that debt is wiped out, the creditor cannot restart the garnishment after bankruptcy.

My garnishment was already in effect when I filed bankruptcy. Can I get the previously garnished money back? 

The answer is: very often, you can get back wages garnished within the 90-day prior to your bankruptcy filing.

But, there’s some fine print: the total amount of the garnished funds must exceed $600.00. You also need to be able to exempt these funds using your bankruptcy exemptions.

Some creditors are very cooperative when returning previously garnished funds. Some are not, and you might need to file an adversary proceeding to get those funds back.

But, don’t delay in contacting an attorney if you have an active garnishment!  Strict deadlines apply when attempting to get back previously garnished funds.

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Need help stopping a garnishment and getting your money back? We offer a free, no obligation attorney consultation.

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Bankruptcy Lawyer Karen Ware serves the following areas: Santa Barbara, Ventura, Oxnard, Camarillo, Santa Paula, Fillmore, Newbury Park, Thousand Oaks, Agoura, Calabasas, Woodland Hills, Encino, Sherman Oaks, Studio City, Burbank, North Hollywood, Los Angeles, California and surrounding areas.

11 U.S.C. 528(A)(4)

"We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code." This statement is required by 11 U.S.C. Section 528(a)(4). But, it does not state the full range of services our firm offers.