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Can filing for bankruptcy stop wage garnishment?

On Behalf of | Feb 26, 2021 | bankruptcy |

Yes. A Glen Burnie or Ocean City bankruptcy filing can stop most wage garnishments.

A wage garnishment happens when a court issues an order requiring your employer to withhold a portion of your paycheck and to send it directly to a creditor.

The creditor gets the right to have your paycheck garnished after it has taken you to court and obtained a judgement. A portion of the debtor’s paycheck is sent to the creditor until the debt is paid or resolved through an agreement with the creditor.

You can’t lose your job over one garnishment, however, you can lose your job over multiple garnishments. As long as there is only one debt being garnished from wages, an employer cannot retaliate against the employee because of wage garnishment. Bankruptcy law does not protect an employee subject to multiple garnishments.

It’s helpful to know that most – but not all – of a debtor’s wages is immune from garnishment.

One way to stop garnishments is to declare bankruptcy.

Once the creditor knows of the bankruptcy, the garnishment must stop. Allowing the garnishment to continue would violate the automatic stay that is an important part of bankruptcy. The automatic stay provides protection for the debtor against creditor contact and attempts to collect on debts.

Because it sometimes take a little while before the court gets notice of the bankruptcy to all of the creditors, the debtor should contact the creditor responsible for the paycheck garnishment as soon as the bankruptcy is filed and tell the creditor that bankruptcy has been filed, whether it is a Chapter 7 or a Chapter 13 as well as the case number, filing date and the name of the court where the bankruptcy filing occurred in order to stop the garnishment as quickly as possible.

It’s important to note that bankruptcy officials take the automatic stay seriously and if a creditor continues to contact you or to collect on the debt, then that creditor will face penalties by the bankruptcy court.

Some types of wage garnishments, such as back child support, will continue even after a Chapter 7 bankruptcy is filed. However, another type of bankruptcy filing, a Chapter 13 case will stop all garnishments, including those for child support obligations. Of course, in a Chapter 13 bankruptcy, the debtor must fully pay the overdue obligations over a three- to five-year plan. A Glen Burnie or Ocean City bankruptcy attorney can provide more details.

Also, under federal law, wages including social security benefits can be garnished for back taxes and student loan debt. This means the Education Department and the IRS can garnish your wages without filing a lawsuit or getting a judgment from the court.

The Law Office of Thomas J. Maronick is open during the pandemic and will continue to meet your Annapolis, Baltimore, Essex, Ocean City, Towson, White Marsh bankruptcy needs. A Glen Burnie bankruptcy attorney can help you to determine the best way to get out of debt, out from under creditor calls and how to keep as much of your property as possible. An Ocean City bankruptcy attorney can devise a strategy for you that allows you to use the bankruptcy laws to your advantage. The consultation is free.

We can meet with you remotely if you have access to Zoom. You can contact Thomas Maronick on his cellphone at 202.288.0167, the law office at 410-881-4022 or through the website for a free consultation.



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