I am already in debt, and now I am facing wage garnishments—can bankruptcy stop this?

It is a particularly nasty catch-22 to have a wage garnishment slapped on you when you are already financially strapped. Having less money at your disposal to pay bills is never a good sign, but your wages are being garnished to pay some of those bills—it certainly seems like a lose-lose situation any way you look at it.

 

Filing for bankruptcy may offer you some relief as far as your wage garnishment goes. If the court has ordered the garnishment to pay off a nonpriority debt, bankruptcy’s automatic stay will go into effect immediately, stopping any wage garnishments in their tracks for the duration of your case. If the debt that got you that pesky garnishment in the first place will be eliminated in your bankruptcy case—such as credit card debt in a Chapter 7 bankruptcy—then when your bankruptcy is over, you garnishment will be permanently banished, too.

 

Just as bankruptcy is not omnipotent in eliminating debt, it also has its limits with garnishments. If a wage garnishment was applied to address debt related to student loans, taxes, or child support, the news is not all good. The automatic stay will keep wage garnishment for back taxes and student loan debt at bay, but once your bankruptcy is over, collection can start up once again. For alimony or child support debt, not only will you still need to pay that debt for the entirety of your bankruptcy, you will also be saddled with any wage garnishments associated with that debt throughout your case.

 

At Curry, Pearson & Wooten, our Phoenix bankruptcy attorneys are happy to answer any questions you may have about wage garnishments or other bankruptcy matters—simply call us at 602-258-1000 to speak with us today!