Bankruptcy and Wage Garnishment in St. Paul

If you have been struggling with debt, you may have faced wage garnishment. Garnishment happens when a creditor gets a court order for your employer to take money from your wages and pay it directly to that creditor. By declaring bankruptcy, you can stop garnishment and other debt collection efforts.

At Walker & Walker Law Offices, PLLC, our seasoned bankruptcy attorneys can help you understand bankruptcy and wage garnishment in St Paul. If you decide bankruptcy is the right option for you, we can provide experienced guidance through every step of the process. Contact us today to schedule your consultation.

Bankruptcy Stops Garnishment

Declaring personal bankruptcy stops your creditors from trying to collect your debts. Whether you choose Chapter 7 or Chapter 13 bankruptcy, the phone calls, letters, and actions such as garnishment must cease as soon as creditors learn that you have filed.

When you decide to declare bankruptcy to prevent garnishing of your wages, our attorneys in St. Paul can work with you to prepare a petition to the court. The petition lists all your assets, debts, and creditors.

As soon as the court receives your petition, it will send a letter to the creditors listed in your disclosure. This letter informs the creditor of your bankruptcy filing and orders it to cease all collection activities on your debt. You or your attorney can provide your employer with a copy of the letter, and your employer must then stop deducting money from your wages for the garnishment.

Can You Get Garnished Wages Back From the Creditor?

If you declare bankruptcy soon after the withholding of your income begins, our attorneys in St. Paul can help you get most or all of the garnished money back.

When you file your bankruptcy petition, you can claim certain property as exempt under Minnesota Code § 550.37. Once you do that, your bankruptcy does not affect the property you claimed as exempt. By claiming exemptions, you ensure that you can live and support your family while you are bankrupt.

Additionally, if the value of the garnished wages falls within the exempt amount allotted to you, you can claim it in your bankruptcy petition. After filing, if the amount garnished was at least $600, the bankruptcy trustee will take action to reclaim money paid to creditors within the past 90 days. As long as you claimed the funds as exempt property, the bankruptcy trustee will eventually return them to you.

Bankruptcy cannot Undo All Garnishments

Garnishments for consumer debt, such as credit card debt, stop when you file for bankruptcy. However, bankruptcy cannot stop garnishment for several other types of debt.

Bankruptcy cannot eliminate garnishments for child support or alimony. These are priority debts, and bankruptcy law does not provide a mechanism to lower or erase these obligations. Bankruptcy also cannot stop garnishments for tax debt due within the past three years, or for a year when you did not file a return. Similarly, if a court garnishes your wages as part of a criminal sentence that requires you to pay restitution, bankruptcy will not prevent the garnishment.

When you meet with our St. Paul attorneys to discuss filing for bankruptcy, we will ask if you have experienced any wage garnishments. We can then explain whether bankruptcy will stop garnishment in your particular circumstances, and, if not, offer other suggestions to help you manage that specific debt.

Discuss Payroll Deductions With Our St. Paul Bankruptcy Attorneys

By filing for bankruptcy, you provide yourself the opportunity to build a strong financial foundation, free from crippling debt. Bankruptcy can eliminate many, but not all, garnishments.

Contact us to learn more about bankruptcy and wage garnishment in St Paul. There is never a charge for an initial consultation, so if creditors are garnishing your wages, contact us today.