Filing for bankruptcy can stop wage garnishment in most cases. When a person files for bankruptcy, an “automatic stay” goes into effect. The stay is a court order that immediately stops most collection actions, including wage garnishments.
Features of and Exceptions to the Automatic Stay
The automatic stay requires that creditors and debt collectors stop all collection efforts.
These include, among other things, the following:
- Wage garnishments,
- Repossessions, and
- Foreclosure proceedings.
This means that creditors cannot continue to take money out of your paycheck once you file for bankruptcy.
However, some exceptions to the automatic stay exist. For example, some debts, such as child support and certain taxes, may not be discharged in bankruptcy and may continue to be collected even during the automatic stay.
Additionally, in some cases, creditors may be able to obtain a court order to lift the automatic stay and resume wage garnishments.
An Automatic Stay Is Not a Long-Term Solution
It is also worth noting that while a bankruptcy filing can stop a wage garnishment, it is generally not a long-term solution to resolving the underlying debt issue. Depending on the type of bankruptcy filed, some debts may be discharged. However, the debtor may still be responsible for repaying certain debts, such as secured debts or debts not eligible for discharge, through a repayment plan.