Jump To Navigation

Bankruptcy Can Prevent or Stop Wage Garnishments

Wage garnishment is a process used by creditors to take a portion of your paycheck after obtaining a court judgment for money owed. The debtor’s employer is required to notify the employee of the garnishment and to obey the order or face a fine or even imprisonment in extreme cases.  Generally, creditors only use this process as last resort when negotiations or other demands for payment of a debt have been exhausted. 

With some exceptions, Federal law limits the percentage of a debtor’s disposable earnings that can be garnished to 25 percent, or the amount by which the debtor’s weekly wage exceeds 30 percent of the federal hourly minimum wage, or whichever amount is lower. Also, a state’s maximum limit may be less than the federal limit and takes precedence.  Moreover, if your wages are garnished for domestic support orders, the amount garnished could be considerably more.

A wage garnishment can be an embarrassing situation and can continue until the debts are paid or until another agreement is reached.  Fortunately, you can avoid this embarrassment by filing a Chapter 7 or a Chapter 13 bankruptcy.  Once the bankruptcy is filed, section 362 of the bankruptcy code imposes an automatic stay of all civil proceedings, including your wage garnishment, and may discharge the garnishment.

If a creditor wants to resume collection, it must ask the court to lift the stay.  The court will only lift the stay if it has a valid reason to do so.  However, the automatic stay will not apply to domestic support obligations such as child support or spousal maintenance.

Once you receive the discharge and the underlying obligations for the wage garnishment was included in the discharge, the creditor can no longer resume the garnishment to collect the debt.  If your case is dismissed without a discharge, then the creditor can continue the wage garnishment.


Read more about our bankruptcy services…

Contact Us for a Free Consultation
Office Locations

Phoenix Office
Wright Law Offices
668 N. 44th St., Ste 320
Phoenix AZ 85008

Telephone: 602-456-6085 / 866-703-3287
Phoenix Law Office

Scottsdale Office
Wright Law Offices
7135 East Camelback Road, Ste 230
Scottsdale AZ 85251

Telephone: 480-845-0145 / 866-703-3287
Scottsdale Law Office

Tempe Office
Wright Law Offices
2238 S. McClintock Dr.
Tempe AZ 85258

Telephone: 480-845-0145 / 866-703-3287
Tempe Law Office

Avondale Office
Wright Law Offices
12725 W Indian School Rd, Suite E-101
Avondale AZ 85392

Telephone: 623-258-4480 / 866-703-3287
Avondale Law Office

Prescott Office
Wright Law Offices
1129 Iron Springs Rd
Prescott AZ 86305

Telephone: 623-258-4480 / 866-703-3287
Prescott Law Office

Mesa Office
Wright Law Offices

1731 W. Baseline Rd.
Suite #100
Mesa, AZ 85202
Telephone: 480-845-0145 / 866-703-3287
Mesa Law Office

Glendale Office
Wright Law Offices
20325 N. 51st Ave., Suite 134
Glendale, AZ 85308
Telephone: 623-258-4480 / 866-703-3287
Glendale Law OFfice

Facebook IconTwitter IconVisit Us On Google+Visit Us On Google+