Monday, September 10, 2012

How to stop a garnishment by filing a Bankruptcy

A lot of people come to me because they have been sued by a creditor and are worried about their wages being garnished.  Some of these people have wage garnishments already going on.  If you are facing a garnishment you have reason to be concerned. In Oregon, a creditor can garnish up to 25% of your net pay. This can cause huge budget problems, especially for those already living paycheck to paycheck.

If you file Chapter 13 or Chapter 7 bankruptcy it will stop a garnishment in it's tracks.  Keep in mind that your payroll department will likely need a bankruptcy case number at least a few days before your payday.  Most of the time employers process payroll a few days, sometimes even a week before payday.  Also, your attorney will need some time to prepare a bankruptcy case before it can be filed. The time to prepare a case depends on how complex your case is and also how good you are at giving your attorney what they need to prepare a chapter 7 or chapter 13 petition.

The bottom line is that if you have been sued, or are already facing a wage garnishment you need to act fast. You  will want to check with your employer to see when their deadline is to get them a bankruptcy case number by to stop the next garnishment. Then, you will want to let your attorney know that date.  Your attorney should be able to tell you what they need and when they need it to put a stop to a pending garnishment.

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