Bankruptcy will immediately stop garnishment.
Because of the automatic stay, bankruptcy stops all collection efforts made by creditors. This includes garnishment of your wages and bank accounts. A garnishment can be obtained by creditors after they receive a judgment against you.
Governmental entities may be able to garnish without obtaining a judgment. These garnishments are obtained through statutory law instead of judicial procedure, but bankruptcy can stop these garnishments as well.
After obtaining a judgment against you, a creditor will file an application for garnishment with the court where they obtained the judgment. They will also serve your employer with an order from the court to withhold up to 25% of your disposable earnings and give that money to the creditor.
If the creditor does not know where you work, the court may order you to appear for Supplemental Proceedings to answer questions about your employment, assets and bank accounts. If you fail to appear to this hearing, the judge may issue a bench warrant against you. Unless you have filed bankruptcy and the civil court removes the hearing from the schedule, you must appear to these proceedings.
My Bankruptcy Team will help you stop legal action and avoid having to appear in court.
Timing of your bankruptcy filing is important.
If we file your bankruptcy at the right time, we can stop the garnishment from coming out of your next paycheck before the check is prepared by your employer.
For example, if you get paid on Friday, and your payroll department processes checks on Tuesday at 5:00 we will need to file and get notice of the bankruptcy to your employer before that time. If you cannot file until Wednesday or Thursday, the garnishment will still come out of your check, but the creditor will pay it back to you. This process usually takes a couple weeks as we make demands from our office to get the money returned.
If we are not able to file until Friday, it will be too late and the money will be kept by the creditor, but all future garnishments will be stopped.
If your wages or bank accounts are being garnished, set an appointment right away to plan your bankruptcy filing.