Wage Garnishments and Bankruptcy

Wage garnishments can have a devastating impact on one’s life resulting in loss of substantial income and can sometimes come out of nowhere when you are not prepared for it.  One of the only ways to stop a garnishment once it has begun is to have a local Alabama bankruptcy lawyer file your case.  When a bankruptcy is filed you will receive something called an automatic stay of protection from the bankruptcy court.  This automatic stay of protection is an order from the federal court that essentially states that all creditors are to stop all attempts to collect on their debts and stop all collection efforts, including garnishments and foreclosure sales, effectively immediately upon the filing of the bankruptcy. 

If the creditor continues to garnish your wages after your bankruptcy has been filed, then they would be in violation of the automatic stay of protection and could be found in contempt of court.  It is this protection from the bankruptcy court that stops all garnishments and foreclosures and is one thing that makes bankruptcy so helpful for many individuals.

The way that a creditor goes about garnishing wages is by first filing a lawsuit in the county that you live in and receiving a judgment for the amount that is owed them.  Once they have this judgment, then they can use it to garnish your wages by filing a process of garnishment and serving it on your employer.  Once served, your employer will begin the process of garnishment resulting in 25% of your income being deducted from your paycheck. 

A creditor can also levy your bank account, which means that they can take a judgment and use it to essentially take money out of your account when the money from your wages hits your account.  The creditors can also attempt to attach their judgment to your property, if you own it, such as your home.  This would create a lien on the home that must be paid in order to sell the property.

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