When you file Chapter 7 or Chapter 13, Section 362 of the Bankruptcy Code imposes an automatic stay. It legally requires creditors and collectors to stop garnishing your wages, freezing your bank account, calling you, and filing or continuing lawsuits. The court notifies your creditors, and the garnishment stops.
If a creditor garnished more than a certain amount in the 90 days before you filed, you may be able to recover that money as a “preference.” The sooner you file, the sooner the garnishment ends and the more of your paycheck you keep.
Under Illinois law, a creditor with a court judgment can generally garnish up to 15% of your gross wages. If you are being garnished, a bankruptcy attorney can often file quickly to trigger the automatic stay and stop the garnishment. Call for a free consultation.
The automatic stay takes effect the instant your case is filed. Once your employer and the creditor receive notice from the court, the garnishment must stop. In urgent situations, an emergency filing can be prepared quickly.
No. Child support and alimony are priority debts, and the automatic stay does not stop garnishment for ongoing domestic support. Chapter 13 can, however, help you catch up on past-due support over time.
For most debts, your employer only learns of the case if it must stop a garnishment. In Chapter 13, plan payments are sometimes deducted from wages, which your employer would process. Your employer cannot fire you for filing bankruptcy.
Attorney Alex Ranjha (JD/MBA) offers a free, confidential consultation. Flexible payment plans. Se Habla Español.
