If wage garnishment is cutting into your paycheck, you may wonder if bankruptcy can make it stop. The answer is yes, in many cases, bankruptcy puts an immediate stop to garnishments. Understanding how this works helps you take control of your finances.
How the automatic stay works
When you file for bankruptcy, something called an automatic stay goes into effect. This court order stops most collection efforts right away, including wage garnishment. Your employer must stop taking money out of your paycheck as soon as they get notice of your bankruptcy. This stay gives you a break from financial pressure so you can sort things out through the bankruptcy process.
Types of bankruptcy and wage garnishment
Chapter 7 and Chapter 13 both stop garnishment, but they work differently. Chapter 7 may wipe out many types of debt, including credit cards and personal loans. If the debt causing the garnishment is discharged, the garnishment ends permanently. Chapter 13 sets up a repayment plan, so while garnishment stops, you may still pay the debt over time through the plan.
Limits and exceptions
Not every garnishment stops with bankruptcy. For example, garnishments for child support or alimony usually continue even after you file. Some tax debts may also fall outside the stay. It’s important to know which debts bankruptcy covers and which it doesn’t so you’re not caught off guard.
Bankruptcy can give you room to breathe if wage garnishment is making life harder. The automatic stay puts a quick pause on most paycheck deductions. Whether you erase the debt or repay it over time, bankruptcy helps you deal with the problem directly and move forward with more financial stability.