Using Bankruptcy to Stop a Wage Garnishment

Immediately upon filing a bankruptcy, the automatic stay is entered.  The automatic stay is an injunction, which prohibits creditors from taking any collection efforts against you, including continuing to garnish your wages. Additionally, the bankruptcy code has a mechanism to recover wages garnished pre-filing.

In Virginia when a creditor files a wage garnishment there is a return date set with the state court.  If the individual under garnishment does not file bankruptcy before that return date, then the creditor will appear, and the court will turn over the garnished funds to the creditor.  However, if the individual files bankruptcy and exempts those funds in their bankruptcy case before the return date, then the garnished wages will be returned to the individual and the creditor does not collect any of your wages.   If you file your bankruptcy one day after the return date, then you forfeit the right to recover those funds.

Therefore, the timing involved in filing your bankruptcy is critical to ensure that you can recover your garnished wages.  If your wages are currently being garnished it is important that you speak to an experienced bankruptcy attorney, so you do not miss these crucial dates.


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