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Does bankruptcy stop garnishments?

April 26, 2017Bankruptcy garnishments

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Does bankruptcy stop garnishments?

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When any type of bankruptcy is filed – chapter 7, 11, 12 or 13 – the federal bankruptcy court immediately issues a restraining order known as the automatic stay, which requires that all creditors cease all collection activity. This includes the requirement that all garnishments be cancelled. Money taken from your wages or bank accounts after the bankruptcy proceeding is filed can generally be recovered. If a creditor fails to stop a garnishment after a bankruptcy is filed, it can be held in contempt for violating the court’s order and will be liable for damages caused to you, including payment of your attorney’s fees. If you are being garnished, you should consult an experienced bankruptcy attorney immediately to find out your options.