Can Bankruptcy Stop Wage Garnishment?

Yes, filing bankruptcy can stop wage garnishment. This article will explain what wage garnishment is, how bankruptcy can stop it, and what other options you have to protect your paycheck.

What Is Wage Garnishment?

Wage garnishment means a court order tells your employer to send a certain amount of money from your paychecks directly to your creditor. Funds can also be directly taken from your bank account. Creditors can use these funds to collect different types of debt, including:

In general, your creditor has to sue you over the debt, and a court hearing and judgment must occur before a judge can order your employer to garnish wages. Your creditor must also inform you of the hearing and allow you to oppose the garnishment. However, a court hearing is unnecessary if the debt is for unpaid child support, student loans, or taxes.

Wage garnishment can worsen a bad financial situation for people who depend on every bit of their paychecks to get by. Thankfully, there are different ways to stop wage garnishment, lower the garnishment amount, or avoid it in the first place.

In General, Bankruptcy Stops Wage Garnishment

Some people facing wage garnishment and other serious debt problems look to bankruptcy to regain control of their finances. Filing for bankruptcy, regardless of whether it's Chapter 7 bankruptcy or any other type, stops most wage garnishment and prevents creditors from seeking new garnishment orders against you.

This is because when you file bankruptcy, the court puts an automatic injunction called an automatic stay into place. The automatic stay comes from the U.S. Bankruptcy Code. It prevents creditors, collections agencies, and even some government entities from pursuing you for the debts you owe while your bankruptcy case is in progress.

The main purpose of the automatic stay is to give you some time and breathing room while the trustee overseeing your case looks over your bankruptcy petition, debts, assets, and income.

When Does the Automatic Stay Begin?

The automatic stay triggers the moment you file bankruptcy, no matter which type of bankruptcy you file for, and it applies to both businesses and individuals.

Creditors must stop garnishing your wages and other collection activities as soon as they receive notification from the bankruptcy court or your lawyer. The federal bankruptcy court can charge creditors with contempt if they do not stop collection actions.

Certain kinds of debt can still undergo garnishment during the automatic stay. This typically happens because they are high-priority and non-dischargeable. Some examples include child support and alimony/spousal support.

In Chapter 13 bankruptcy, a special automatic stay provision protects co-debtors from collection efforts, such as co-signers on loans.

Creditors can ask the court to allow wage garnishment to continue if they can show that there is good cause or good reason to continue garnishing. Most of the time, creditors with unsecured debt cannot prove this.

How Long Does the Automatic Stay Last?

The automatic stay is in effect until the court grants you a bankruptcy discharge or dismisses your case because you do not qualify. If the debt was part of the Chapter 7 discharge, the creditor cannot continue garnishing your wages. If you did not get a discharge of the debt, wage garnishment can continue.

If you filed for Chapter 13 bankruptcy, your repayment plan should include the debt so wage garnishment should not continue, unless it's a student loan or debt. Garnishment may continue for student loan debt unless you reach a settlement.

Other Ways To Stop Wage Garnishment

Bankruptcy isn't the only way to stop wage garnishment. You can take many steps to eliminate or reduce wage garnishment.

Economic Hardship

One way you can limit wage garnishment is by petitioning the court and letting the judge know that you need more of your paycheck to cover your basic expenses because the wage garnishment is causing economic hardship.


In some states, you can ask the court to appoint a trustee who will pay your creditors based on one lump payment you make to the trustee. While in trusteeship, creditors are not allowed to garnish your wages.


You can also ask the court to stop wage garnishment because you qualify for an exemption. Wage garnishment exemption laws exist at the state level, so check out the laws of your state. Most states require you to submit an exemption form in order to stop garnishment. Many states allow wage garnishment exemptions for people recently receiving government assistance such as food stamps or medical assistance.

Creditor Violation

Sometimes, creditors take more money out of paychecks than they are legally allowed to take. Federal law states that creditors can only garnish the lower of:

  • 25% of your disposable earnings, which is your gross income minus any legally required deductions
  • The difference between your disposable earnings and 30 times the federal minimum wage

Child support and alimony debts can garnish a significant percentage of your wages.

Some states also have laws allowing for less of your paycheck to be subject to wage garnishment, so check out the laws of your state.

Finally, the creditor may be in violation of the law, and you could stop the garnishment if they did not follow the correct process in seeking wage garnishment, such as by not notifying you properly of the lawsuit or hearing.

Debt Counseling

A non-profit consumer credit counseling service (CCS) may be able to help you avoid wage garnishment by negotiating a settlement with your creditor in which you pay off your debt over time. Be cautious of for-profit debt relief companies charging fees for a service that might not get you the desired results.

Recover Wages

Finally, you might recover wages previously garnished within 90 days of filing for bankruptcy as long as the wage garnishments added up to $600 or more and you exempted the wages in your bankruptcy filing.

You can find out all of the ways available to you to stop wage garnishment by meeting with a bankruptcy lawyer in your area.

How To Avoid Wage Garnishment

The best way to avoid wage garnishment is to stay on top of your debts and communicate with your creditors. Even if you cannot afford to keep making payments, contact your creditor and try to find a solution.

If your creditor has already sued you and gotten a garnishment order against you, they will likely still send you one more demand letter asking you to pay voluntarily before the garnishing begins. Responding to this letter and negotiating voluntary payments before garnishment begins is a good idea.

Creditors don't like going through the expense and headache of wage garnishment, so they are often willing to work with you. This would help both you and the creditor.

Do I Need a Lawyer To File for Bankruptcy?

If wage garnishment is causing you financial stress, you may be wondering if filing for bankruptcy is a good option for you. Deciding whether to file for bankruptcy, regardless of whether you should, is best approached with the guidance of an attorney in your area, one who is familiar with bankruptcy forms and bankruptcy law

Bankruptcy can give people a fresh start. However, it also damages your credit score, and many debt situations do not qualify.

You are not required to have a lawyer to file bankruptcy, but bankruptcy is a complex legal process with many strict requirements, so it's best to get a lawyer's help. At the very least, a bankruptcy attorney can provide critical legal advice to help you understand which type of bankruptcy to file for and which of your debts may be dischargeable. If you have questions about wage garnishment, wage garnishment orders, or similar inquiries, contact a bankruptcy lawyer today.

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