Bankruptcy Basics: Halting the Garnishment of Your Paycheck
Bankruptcy petitioners always have a reason that they filed for bankruptcy. In every instance it was because they had too much debt to handle, but in almost every instance there was also that one last problem or situation that caused them to make the leap to petition the court for a discharge of debt. For many, this occurs when their paycheck is garnished.
What Is Wage Garnishment and Who Can Garnish My Wages?
Wage garnishment refers to a creditor or debt collector obtaining permission from the court to take money directly out of a debt holder’s earnings and/or tax refunds. There are restrictions put in place for the protection of the consumer: limitations on how much can be garnished, the length of time the garnishment can stay in place (in some states), and the right to dispute the wage garnishment with the court.
How to Stop Wage Garnishment with Bankruptcy:
The first step to stopping wage garnishment through bankruptcy is to file your bankruptcy petition. You’ll also need proof that you completed the required credit-counseling course. When the bankruptcy court clerk has accepted the paperwork, you receive an official court stamp and case number that confirms the filing.
Next you need to touch base with your employer. In many cases, the first time an individual learns that their wages will be garnished is from their employer even though a notice is supposed to be sent out by mail. When trying to stop the garnishment, you’ll need to touch base with whoever handles the payroll or human resources at your place of employment in order to request a copy of the Earnings Withholding Order (EWO).
You’ll find the information you need on this form: creditor name and any legal representation involved in the case. This is the info you’ll use to inform the creditor that you have filed for bankruptcy. They’ll want proof, so you’ll need the ability to fax or email the EWO along with your proof of bankruptcy filing so they can verify your bankruptcy petition has been filed with the court. It’s also best to mail copies of the documentation by certified mail. In almost every case, the creditor will immediately confirm the bankruptcy filing and then notify the county sheriff to terminate the wage garnishment that is in place.
If, for some reason, this doesn’t happen, you can notify the sheriff yourself. The information needed to do so is also in the garnishment order. The sheriff needs to receive an official notification from the creditor. Once the sheriff receives this, they will notify the employer to stop garnishing wages.
This is the point at which there is often a delay in the process of getting the garnishment of your wages to stop. The employer can’t stop garnishing wages simply because you pass along word that you filed for bankruptcy. They have to receive an official notification from the sheriff. The sheriff’s departments are often understaffed and overworked meaning this might take some time to accomplish. In some cases, just getting the sheriff’s department to process the request could take days, weeks or, in some cases, even months. Until they process the request and send the notification to your employer, the garnishment will continue. In the meantime, make sure to let the payroll department know to watch for the notice to stop garnishing wages from the sheriff’s department.
If you have additional questions about how filing for bankruptcy can stop wage garnishment or other intricacies of southern California bankruptcy law, please get in touch with one of the attorneys at Westgate Law. We have the answers you need.