How Bankruptcy Stops Wage Garnishment
Filing bankruptcy triggers the automatic stay under Section 362, immediately halting most wage garnishments. The stay takes effect the moment the petition is filed.
The automatic stay stops: Wage garnishments, bank levies, lawsuits, foreclosures, repossessions, utility shutoffs, and most other collection actions.
Exceptions
- Child support and alimony -- Continue despite the stay (Section 362(b)(2))
- Some tax garnishments -- IRS can sometimes continue certain actions
- Criminal restitution -- Generally not affected
Repeat filers: If you had a case dismissed within the past year, the stay may be limited (362(c)(3)) or absent (362(c)(4)). See stay limits.
Recovering Garnished Wages
Wages garnished within 90 days before filing may be recoverable as preferential transfers under Section 547.
If Garnishment Continues After Filing
- Send written notice of filing to employer and creditor
- Keep records of every paycheck showing continued garnishment
- Ask the court to enforce the stay -- recover damages under Section 362(k)
Emergency Filing
You can file a "bare bones" petition with just the fee and basic forms. The stay takes effect immediately. You have 14 days to file remaining schedules.
Learn More About the Automatic Stay
Related Resources
automaticstay.org -- Complete guide to the automatic stay
relieffromstay.org -- When creditors ask to lift the stay
howtofilebankruptcy.org -- Step-by-step filing guide