Garnishment actions represent one of the primary methods in which certain debts are collected. If a plaintiff (a person company or governmental entity) sues an individual and obtains a judgment against that individual, the plaintiff can take additional steps to garnish the defendant’s regular wages. Separated and divorced spouses seek garnishment of wages from their ex-partners who owe back child support. When a regular wage earner sees part of his or her pay check reduced by garnishment, can the wage earner file bankruptcy to stop the garnishment?
The simple answer is, “It depends.” In many situations, the bankruptcy will stop the garnishment – at least temporarily. Once a person files bankruptcy, an automatic stay goes into effect that prohibits and immediately stops most collection activities by creditors. This means that wage garnishments are also stopped as long as the bankruptcy stay is in effect. However, the creditor which is collecting debt through the garnishment process can ask (or move) the court to lift the stay with respect to its particular garnishment.
Furthermore, the automatic stay does not apply to domestic support obligations such as child support or alimony payments. These so-called “priority debts” are generally unaffected by the automatic stay and cannot be discharged by filing bankruptcy. Hence, a party receiving child support via garnishment ordinarily does not have to seek relief from the stay as other creditors do.
When the court does lift the automatic stay pertaining to a particular debt, the garnishment may continue. However, if the discharge applies to the entirety of a particular debt, then garnishment cannot resume by the creditor of that claim as the debt itself is entirely extinguished. Wage earners facing regular garnishments of their paycheck may want to consider bankruptcy as a means of stopping the garnishment but need to consult with bankruptcy attorneys before taking the important step of filing a bankruptcy case.
In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases and can specifically provide advice as to disposition of property in Chapter 7, Chapter 11 and Chapter 13 cases.. The New Mexico firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.