If you are working under a garnishment order, a portion of your wages are being taken out of your paycheck each pay period to satisfy a debt. If the garnishment is putting a strain on an already tight budget and you have additional debts that you do not have the ability to pay, you may wish to consider filing for bankruptcy protection. Immediately upon the filing of a bankruptcy petition, an automatic stay will take effect and the garnishment must stop.
Garnishment Process
A creditor must follow state laws and procedures to obtain a garnishment in most cases. Federal debts are the exception to this rule. A creditor must first win a lawsuit in court which will result in a monetary judgment being entered against you for the amount you legally owe the creditor. If you do not immediately pay the full amount of the judgment, the creditor may return to court and ask for assistance enforcing the judgment. Wage and bank account garnishment are often available to enforce a judgment. If the courts grant the request for wage garnishment, an order will be sent to your employer ordering him to hold back a certain amount or a percentage of your wages and forward the money to the court to help satisfy the judgment.
Bankruptcy
The United States Bankruptcy Code provides the rules and regulations under which an individual, partnership or corporation may file for bankruptcy protection. An individual may file under Chapters 7, 11, 12 or 13 of the code. Chapter 7 protection requires the petitioner to pass a means test and is therefore usually reserved for low-income petitioners with few assets. A Chapter 11 is generally filed by a partnership or corporation but may be used by an individual who has a business to protect. Family farmers and fishermen may use Chapter 12 to protect family fishing or farming ventures. Individuals who earn too much to qualify for a Chapter 7, or who have non-exempt assets they wish to keep, must file a reorganization under a Chapter 13.
Automatic Stay
When a bankruptcy petition is filed, an automatic stay is entered by the court. The petitioner is not required to request one; it is something done automatically in all bankruptcy cases. All creditors are notified of the filing of the petition as well as the automatic stay. During the time that the automatic stay is in place, creditors may not initiate or continue any collection action for debts of the petitioner -- including wage garnishments. The automatic stay will usually remain in effect until the bankruptcy is discharged unless a creditor ask for the stay to be lifted and provides a valid reason for lifting it to the court.
How To Apply for Bankruptcy Protection
All bankruptcy petitions begin by filing the petition in the appropriate court. Bankruptcy falls under the jurisdiction of the federal courts and therefore the petition must be filed in the federal court in the jurisdiction where the petitioner is domiciled. The U.S. Courts website provides forms and resources for filing bankruptcy; however, bankruptcy is highly technical and consultation with an attorney is advisable.
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