Several people decide to file bankruptcy once a creditor begins to garnish wages. Per Oregon Staute a creditor that has a judgment lien against you can garnish up to 25% of your net pay. That's a big hit when you are trying to pay for rent/mortgage, food, gas, insurance and all of life's requirements.
Most people understand that filing a bankruptcy will put an immediate stop to future garnishments. But, what about the amount that a creditor got before you got a chance to file? Can that be recovered? The short answer is that it depends. If a creditor garnishes you $600 or more within the 90 days of your bankruptcy filing date you may be able to get it back. You will need to properly disclose the garnishment recovery in your bankruptcy schedules. Also, you must be able to exempt (protect) the amount using one of the available bankruptcy exemptions. Many times my clients are able to apply the Federal Wildcard Exemption to the garnished amount and exempt the entire thing. When they do this, we will make a demand to the judgment creditor to return the funds because they are an exempt asset and recoverable by the debtor in the bankruptcy case.
Our firm has recovered dozens of garnishments and saved our clients hundreds, sometimes thousands of dollars by getting this money back into their pocket.
If you are filing bankruptcy and have been garnished in the recent past make sure you or your attorney is addressing this issue and doing everything they can to get the most money back possible.
For more bankruptcy information, visit our website or call 503-352-3690 and schedule a free consultation.