Posted on June 2, 2009 at 2:54 pm I have old credit card debt and I think they are about to garnish my wages. If I file bankruptcy will that prevent these garnishments from happening?

Posted on June 2, 2009 at 3:07 pm In the United States there is something called the "automatic stay" within the US Bankruptcy law. In simple terms, once an individual has filed a bankruptcy petition, debt collectors may not attempt to collect on the owed amounts. As a result, they are not allowed to garnish your wages, so bankruptcy in effect would prevent them from doing that. Now, the question is, how do the creditors find out you have filed bankruptcy?

Posted on June 2, 2009 at 3:13 pm Well, that is a good point, and I would like to add something to the originally posted question, "Can Bankruptcy Stop Garnishments." Technically (while this was not the intention of louis v clearly by his comment), that implies that a garnishment is already in place, and I think it would be helpful to answer that as well. Once the bankruptcy petition has been filed and the automatic stay kicks in, it should also stop any garnishments that are in place (unless it is for child support or alimony). I suggest once the petition is filed to contact the creditor's attorney to let he or she know you have done so. Also, let your payroll/hr department at your workplace know. You can do this by turning over a copy of the bankruptcy petition (I believe all they would need is Page #1).

Posted on June 4, 2009 at 12:29 pm I am looking into debt settlement and credit counseling right now- would either of those prevent my wages from being garnished?

Posted on June 4, 2009 at 1:01 pm Ned, Attempting to settle your debts or reduce your interest rates through a debt management program will not prevent a garnishment from happening. Outside of filing bankruptcy, the only way to prevent a garnishment from happening technically is by resolving the debt or remaining current on your monthly payments. You could do this by paying the debt off in full, bringing your account current, or trying to settle the debt if it is past due at this time. If you are making your payments on time every month a creditor will not try and sue you, and if you pay it off or settle it, the account would be resolved and the same applies.