Filing for bankruptcy is an excellent way to not just get rid of your debts but also to stop collection actions by creditors. Wage garnishment is something that people fear the most. One of the major concerns people have while filing for bankruptcy according to lawyers of Los Angeles based bankruptcy law firm Recovery Law Group is whether bankruptcy will stop future wage garnishments or not and if it can also help you get back wages which were garnished earlier.
If the wages are not being garnished as a result of unpaid student loans or child care payments, then bankruptcy can prevent future wage garnishment as well as get earlier garnished wages back. However, there are certain conditions attached to it, like:
- Wage garnishment must have taken place within 90 days prior to the bankruptcy filing and should be $600 or more.
- Exempt wages once returned to you
In case these two conditions are fulfilled, you need to decide whether you want to get the garnished wages back, as you are required to file adversary proceedings within the bankruptcy case. This will amount to additional lawyers’ fees. If the attorney fees are more than the wages being exempted, it is not worth the time and money.
It is important to make the decision before filing for bankruptcy as garnished wages would be included on your bankruptcy schedule and then they need to be exempted. It is important to note that garnished wages will not be returned immediately and will take some months to be returned.
Alternately, you could recover garnished wages through a demand letter to the creditor. An attorney well versed with bankruptcy laws knows that these funds need to be returned to you else adversary proceedings will be filed. However, since adversary proceedings can be filed only till the bankruptcy case is open, you need to file the papers accordingly. Here it is important to note that chapter 7 bankruptcy ends within 120 days!
If the wages were garnished from your pay and not sent to the creditor then they must be with your employer. In such a case, once the employer receives notice of your bankruptcy, they should reverse the garnished wages to you; but you will be able to keep them only if they are exempted in bankruptcy. If wage garnishment is one of the reasons for a bankruptcy filing, you need to contact a bankruptcy attorney. Call 888-297-6023to to discuss your case with experienced bankruptcy lawyers.