Garnished Wages? Filing Bankruptcy Can Get Your Money Back

Talk about being kicked when you’re already down.

You work hard to pay your bills and feed your family, but maybe the paychecks don’t stretch far enough to cover it all. Maybe your spouse lost his or her job; maybe you’ve had a medical emergency; maybe you’ve been borrowing from Peter to pay Paul, relying on credit to pay your debts, and now you’ve maxed out.

Your financial footing, already precarious, starts to slip. Rent, utilities, and groceries being first on your priority list, you can’t pay your debtors. Harassing phone calls start coming in — so you stop answering the phone. Someone comes to your door with a sheaf of papers: the creditor has filed a lawsuit seeking payment. You can’t afford a lawyer — or so you think — and so you ignore this, too.

The next thing you know, the court has issued a judgment against you not only for the amount you owe the creditor, but also for various fees the company has added. You’re in deeper waters than ever, and you still don’t know how you’ll pay.

But your employer knows, because the court has served them with a writ of garnishment requiring them to deduct money from your paychecks and send it to the creditor. Now you have less money than ever with which to make ends meet. Will you able to make your rent or mortgage payment? Will you lose your car?

Help when you need it – Garnished wages could be returned to you!

Those aren’t the only choices, however. Here’s another: how about getting rid of those garnishments, and taking your whole paycheck home again? In the process, you may be able to eliminate your debts while keeping your car and your house, and have some or all of the garnished money reimbursed to you.

Does this sound too good to be true? It isn’t — not if you have a good attorney.

If you’re in over your head financially and your paychecks are being garnished, you might consider filing bankruptcy. A process that takes about four months to complete, bankruptcy can relieve you of most of your debts except the ones you want to keep, such as your mortgage and your car. And if your paycheck is being garnished, filing bankruptcy can stop those garnishments right away.

When I file a petition for bankruptcy for a client whose wages are being garnished, I always ask for the employer’s contact information so I can notify them of the filing and ask them to halt the garniture. Most employers will comply.

And here’s even better news: If you declare bankruptcy and you’ve lost more than $600 to garnitures, we may be able to get that money back for you. The law allows us to collect up to six months’ garnished wages from the creditor who took them — and it goes directly to you, not to any other creditors, not to your attorney, but to you.

Eye on the prize: financial freedom

Efforts to recover garnished wages don’t always succeed. The creditor may fight to keep the money it has collected, especially if it’s a smaller, less sophisticated business. But if you’re already filing bankruptcy, what do you have to lose in the attempt?

I recovered $800 for one client. Imagine her delight to hear, “Not only am I discharging your debt, but I also have a check for you.” She thought I was a superhero!

Claiming already-garnished wages, however, is icing on the proverbial cake. If you’re losing some of your paycheck because of garnitures, you should call a bankruptcy lawyer right away. Once you file, federal law protects you and your paycheck from any more garnitures.

Think you don’t qualify for bankruptcy? Think again: the requirements are different than most people think. A single person earning less than $52,996 falls within the income requirements for bankruptcy filing; that threshold increases for couples, and again for families.

Garnished Wages? Filing Bankruptcy Can Get Your Money Back — and Your Life | Copyrighted Material of the Quiroga Law Office, PLLC