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Bank Account Garnishment

Filing Bankruptcy Could Halt Garnishment

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If you've fallen on hard times and gotten behind on bills, you may have received a notice of garnishment from one of your creditors.

A successful bankruptcy filing can halt garnishment, but it's important to know a bit about what happens when money from your bank account is garnished and what to expect next.

Explore your options with help from a bankruptcy attorney. To talk to a lawyer about the bankruptcy process, fill out our free bankruptcy review form to connect with an attorney for a free, no-obligation consultation.

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What Is Garnishment?

Garnishment is regulated at both the federal and state levels, so the specifics of your potential for garnishment will depend on where you live. Here are some basics on how garnishment works:

  • Garnished wages: If you have not made payments according to your loan terms, a creditor may try to have your wages garnished to cover the debt(s). This means that the creditor sends an order of garnishment to your employer and the employer pays a certain amount of your wages directly to that creditor, deducting the amount from your salary.
  • Bank levy: If you have funds in a bank account, creditors may also get a court order to freeze your account(s) and access the funds that are in them, in some cases up to 100 percent of your balance.
  • Garnishment limitations: The federal government limits the amount of your pay that can be garnished to 25 percent. However, several state laws set an even lower garnishment threshold.
  • Effects of garnishment: While having your wages garnished can be embarrassing, federal law prohibits employers from firing workers for receiving orders of garnishment. Outside your work life, though, garnishment may damage your credit history and thus hurt your ability to get loans.

What Debts Can Lead to Garnishment?

Again, laws vary by state, and some states set strict limits on what types of debts can be collected by garnishing a person's wages. In nearly every state, though, failing to pay the following types of debts can lead to garnishment:

  • Taxes: At both the federal and state level, unpaid taxes can lead to the government garnishing your wages.
  • Student loans: Educational loans that are federally funded can also lead to wage or bank account garnishment.
  • Child support: If you fall behind on child support payments, you may find that your wages are garnished to cover them.
  • Court fines or fees: If you don't pay restitution or fines that are ordered by a court of law, you could be subject to garnishment.

To get an idea of what the laws are where you live, consider speaking to a bankruptcy attorney practicing in your area, who will likely have an idea of whether or not your debts could be subject to garnishment.

Bankruptcy Could Stop Garnishment

Having your wages garnished can make you feel like you’ve lost control on your finances, and in a sense, you probably have. But don’t despair: filing for personal bankruptcy may halt garnishment and put you on track to financial stability.

If you’re ready to end wage garnishment and move toward a new financial future, take the first step and contact a bankruptcy lawyer in your area today.

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