Being in debt can feel like drowning slowly in a sea of overdue bills. You want to pay your creditors, but you just no longer have the resources. Just when you think things cannot get worse, you receive a notice that your wages are being garnished.

What is wage garnishment?

When a creditor sues you defaulting on debt, a court must decide whether you owe the debt and how you owe. If the court finds that you owe the debt, the judgement can allow the creditor to use debt collection tools like wage garnishment. Wage garnishment occurs when a portion of your wages is sent to directly from your paycheck to a creditor. With wage garnishment, a creditor can take 25 percent of your earnings or more.

What are your options?

For someone who is already struggling with debt, this can be catastrophic. However, most types of wage garnishment can be halted with bankruptcy proceedings. When you file for bankruptcy, an automatic stay occurs which prevents creditors from collecting debts.

What happens depends on what stage of the process you are in. Filing for bankruptcy can stop a creditor lawsuit from being filed. If the creditor has filed the lawsuit, entering bankruptcy protection prevents a judgment from being rendered. Even if a judgment was declared, filing for bankruptcy prevents the garnishment from occurring. Or if the garnishment has already occurred, the automatic stay halts most garnishment payments.

Will garnishment continue after bankruptcy?

If you pursue a Chapter 7 bankruptcy, most debts will be discharged with your bankruptcy filing. That means most wage garnishments will be permanently discharged. Debts that will not be discharged with bankruptcy include student loans, IRS tax debt, and a few others. If you file for Chapter 13 bankruptcy, you create a payment plan to pay back your debts. This payment plan should also protect you from wage garnishment, since you will be working to pay back all your creditors.

There are some types of wage garnishment that are not halted by bankruptcy. Your wages can continue to be garnered for child and supposal support payments. While you are going through bankruptcy, even new wage garnishments can occur for these types of payments.

If you are unsure whether filing bankruptcy is right for you, you may consider contacting an attorney experienced in bankruptcy proceedings. An attorney can help fully explore your options for relieving debt and may not necessarily recommend filing for bankruptcy.