Can bankruptcy stop garnishment?
In most cases, but not all, yes.
Filing a bankruptcy starts an “automatic stay” under 11 U.S.C. §362. The stay acts like an injunction or order. It stops creditors from taking legal actions such as garnishment against the debtor or the debtor’s property. The stay may also stop a foreclosure (at least temporarily) or prevent a lawsuit from starting or continuing while the bankruptcy is pending.
But the automatic stay has limitations. Generally, it will not stop a criminal action against the debtor. It will not stop actions to establish paternity, child custody or visitation. It does not apply to parts of divorce actions. It will not stop the collection of domestic support obligations ordered by a court such as child support or alimony (spousal maintenance).
Thus, garnishment to collect child support or alimony (spousal maintenance) cannot be stopped by filing bankruptcy.
In many cases bankruptcy will do more than simply stop a garnishment. A bankruptcy might be used to recover funds already garnished. If wages or other funds are now being garnished, or if money or other property has been garnished recently, you should consult a lawyer immediately. It might be possible to recover all or part of the funds. Your right to recover garnished funds depends on how quickly you respond after garnishment, the amount garnished, the property you may be able to exempt and other factors.
Have further questions that are not covered in our Bankruptcy FAQ pages, we understand. Contact us today for help and assistance with your financial issues. A simple phone call, (651) 639-0313 or email today can relieve your stress and change your life. Contact us today!