The sooner you act to stop a garnishment of wages by filing bankruptcy the better.  Of course, stopping the deduction from someone's wages is most important.  The preparation and service of a Notice of Automatic Stay within minutes of the filing of a bankruptcy case is the quickest way to stop a garnishment.  Since the judgment creditor must release the writ of garnishment before most employers will stop the garnishment deduction, the service of the Notice of Automatic Stay on the judgment creditor is the quickest way to stop the garnishment.

     There are other benefits to acting quicker to stop the garnishment.  In every bankruptcy case a Trustee is appointed to oversee the case.  One of their main duties is to recover nonexempt assets and nonexempt proceeds in order to pay creditors.  One of the things that a Trustee can recover is garnishment proceeds within the 90 days prior to the filing of the bankruptcy.  If a person waits until substantial wages or bank account balances have been garnished within the 90 days prior to the bankruptcy filing, the Trustee will be more likely to pursue the recovery of the garnished proceeds from the creditor.  The consequence on the person filing bankruptcy is that if the Trustee is going to ditribute money to creditors, they will also want to recover any nonexempt bank balances, wages, tax refunds, etc. in order to increase the amount they pay the creditors.  Many times if it was not for the garnishment proceeds, there would not have been ehnough of other assets to justify having the person filing bankruptcy turning over any nonexempt assets.  So the sooner the garnishment is stopped, the less likely it will cost the person any other nonexempt assets.

Dennis Babiniec
Bankruptcy attorney
10701 Melody Dr., Ste. 350
Northglenn, CO 80234
(303) 451-9110
  posted: November 11, 2016 - Dennis Babiniec - Bankruptcy Lawyer - Blog
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