Yes, both wage and bank account garnishments can be stopped by filing bankruptcy. Garnishments after the bankruptcy is filed violate the automatic stay.
Ideally, you will file bankruptcy before the garnishment order is served on your employer or bank so none of your money is seized. But, if a garnishment order is already in place, seizure of post-bankruptcy wages and account funds is stopped. You won’t get the money back that has already been seized, but future seizures are banned.
In Kansas, wage garnishments are continuing paycheck to paycheck until the judgment is paid, so the sooner you file the bankruptcy case, the sooner the garnishment stops. When does it stop? Wage garnishment stops for wages EARNED after the bankruptcy filing. Since most payrolls are one paycheck behind, the garnishment should be lifted for the pay period ending after the bankruptcy filing, which is usually the paycheck a week or two after the filing.
The employer must honor the garnishment until he receives a release from the state court even if you have filed for bankruptcy. It is important to list the creditor and its attorney in your bankruptcy schedules so notice of the bankruptcy goes to them. Ask your bankruptcy attorney to notify the creditor’s attorney right away to help speed up the stopping of the garnishment.
We are often asked if one can “list” creditors once a lawsuit or garnishment starts. Yes, you can and you must because you are required to list all creditors. It is a false myth that once you are sued or garnished, you can’t get bankruptcy help from the creditor.
About Jill Michaux
