Can filing bankruptcy stop my wage garnishment?
It can be hard to make ends meet under normal circumstances. In Arizona, creditors can garnish up to 25% of your take-home pay, depending on the type of debt. If you’re already living paycheck to paycheck, wage garnishment be disastrous.
Luckily, filing bankruptcy can stop most garnishments. When you file your bankruptcy case, the bankruptcy court issues an order called the automatic stay, which stops creditors from initiating or continuing any action against you. Once the bankruptcy is filed, we notify your employer, and your employer will stop the garnishment.
If your wages are being garnished for domestic support obligations, such as child support or spousal maintenance (alimony), a chapter 7 bankruptcy will not stop the garnishment. A chapter 13 garnishment will stop these garnishments, but the obligation will have to be paid in full through your chapter 13 plan.