Can Bankruptcy Stop Wage Garnishment?

In most cases, yes, bankruptcy will stop wage garnishment. Upon filing your bankruptcy, the Automatic Stay of Bankruptcy is triggered, which is a federal injunction against your creditors that stops most collection activities, including wage garnishment. You will have to notify both the creditor and your payroll department that bankruptcy has been filed, and the garnishment should stop immediately.

Additionally, funds that have been garnished already are likely able to be recovered, at least to some extent. The ability to recover garnished wages varies based on the exemptions that your state uses, as different states exempt different percentages of wages earned. There is a 90-day lookback period in the Bankruptcy Code to recover pre-filing transfers. An experienced bankruptcy attorney can often use the lookback period, along with the applicable exemption, to recover wages that were garnished within the 90 days before the bankruptcy filing.

There are some wage garnishments that are not required to stop upon the filing of the bankruptcy case. Most commonly, these are for domestic support obligations such as alimony or child support. As these debts are given priority treatment under the Bankruptcy Code and the garnishment is pursuant to a valid court order, these often continue after filing bankruptcy and prior garnished wages cannot be recovered.

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