Chloe Meltzer | October 19, 2022
Summary: Did you have a judgment filed against you that resulted in your wages being garnished? Find how long it will take to get those garnished wages back.
If you have outstanding credit card bills and loans, it can be a scary situation. As matters progress you may get to the point where money begins to be taken directly from your paycheck every pay period.
This process is considered wage garnishment, and it occurs when a creditor obtains a judgment against you and then directs your employer to give them a portion of your paycheck each period. This is done in order to pay off the debts that you owe. Although it would be a problem for anyone, it is especially an issue for someone who is behind on their bills already.
Taking money from your wages is going to hurt you even more, and if this is happening to you, you most likely want to stop it. If you want to stop creditors from taking your hard-earned wages then you may need to file a Chapter 7 bankruptcy.
When you file for bankruptcy, something called an automatic stay goes into effect. This blocks creditors from collecting from you further, but also from contacting you whatsoever. This leads to creditors being blocked from garnishing your wages and taking money from your accounts. There is one exception, and that is for alimony and child support payments, which will always continue to be garnished from your pay.
If you have a creditor that has garnished your wages after a bankruptcy has been filed, then you need to call them. If you have called them after the bankruptcy was filed to have the garnishment stopped, then there is most likely some type of issue with timing. Typically this is due to the payroll already having been processed.
You can let your employer know about this situation since they will already be notified of the garnishment. Then, you can follow up with the creditor to make sure they are issuing a refund. If you have officially filed for a long period, and your wages are still being garnished, then they are violating the automatic stay.
Most creditors are aware that that the Court can hold them in contempt, which leads to fines. Most often there should be no issue about refunding your money that was garnished. If they do not agree to refund you or continue to take money from your wages, you need to report it to the court.
If your wages have been garnished you may be able to get some of them refunded. For example, if the garnishment occurred 90 days before you filed bankruptcy, then you may be able to obtain this money that was taken from your paychecks. What you will need to do is have an exemption you can claim. In this situation, you have a few options.
First off, speak to your bankruptcy trustee about whether or not they believe you are entitled to a refund of the money. If your trustee does not believe you are entitled to any type of refund, you can go to court to take action to recover the money. Although many people consider hiring a lawyer to file a lawsuit against the creditor, you can try to do this on your own. You should hire an adversary proceeding against the creditor, which is a lawsuit within your bankruptcy.
If you are considering hiring a lawyer, you need to see if it is worth it. In some cases paying a representative to collect the garnished wages may be more than the cost of what you will receive back. Speaking to a legal aid organization may prove helpful, regarding your specific situation.
If your wages are being garnished then filing for bankruptcy is the only way you can stop them from garnishment. It may seem like an easy way out, but unless you suddenly have the funds to pay back your creditor, or you can figure out a settlement, you have no other option.
Bankruptcy does have lasting effects on your credit and may cause problems in the future. It should only be used in extreme situations. After you file for bankruptcy, all garnishment will stop. Any money that was garnished 90 days before your bankruptcy filing should be able to be taken back. Although this is not an easy situation, and filing for bankruptcy can eliminate your debt, it is not the best option for everyone. Be sure to weigh your options, and make the best decision for you.
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