Preventing Wage Garnishment by Filing Bankruptcy : What You Need to Know

Preventing Wage Garnishment by Filing Bankruptcy by Law Offices of Nick Nemeth

Declaring bankruptcy is one of the solutions to get rid of debt obligations. What you may not know is that it is also a way to stop wage garnishment in Texas and other states. You can also recover your garnished wages by filing bankruptcy. There are, however, certain exceptions to this provision. At the Law Offices of Nick Nemeth we can help you learn more about bankruptcy and how you can use the law to prevent creditors and the IRS from garnishing your wages.

To get you started, let’s learn a bit more about the nexus between wage garnishment and bankruptcy.

Understanding “Automatic Stay”

Automatic stay is an action that takes place when you file for Chapter 7 or 13 Bankruptcy. An automatic stay requires all creditors and collectors to immediately stop any and all of the activities they were pursuing to collect debts from you. That said, when an automatic stay takes place, wage garnishment also stops. If any creditor wants to recover their payments, they must first request the court to lift the automatic stay, for which they must submit a valid reason.


Although an automatic stay stops the process of wage garnishment, there are few exceptions to the law. An automatic stay, for instance, cannot stop wages garnished related to domestic support obligations. Wage garnishment for debt obligations such as alimony and child support continue even after the automatic stay stops, as the court considers these payments as priority debts.

Wage Garnishment after Bankruptcy Case Ends

An automatic stay ends after a bankruptcy case closes. Your creditors, however, cannot garnish your wages for the debts the court has discharged. If, for instance, the court has discharged your credit card payments, your credit card company cannot garnish your wages even though the automatic stay has come to an end. An automatic stay also comes to an end if the court dismisses your case without offering you a discharge. If this happens, creditors can continue to garnish your wages for outstanding debts.

Recovering Wages Garnished before Bankruptcy

Taxpayers, who meet certain conditions, can even recover wages garnished before they filed bankruptcy. The total garnished wages, for instance, must be more than $600 and have been garnished 90 days before filing bankruptcy. You must also have applied for enough federal exemptions to cover the garnished wages. Speak to a lawyer to learn about other conditions you must meet to get recover wages garnished before filing bankruptcy.


When it comes to stopping wage garnishment by filing bankruptcy, several facts require your attention. For instance, to stop the garnishment after filing for bankruptcy, you need to send a notice to your employer. The Law Offices of Nick Nemeth have years of experience in dealing with wage garnishment and other similar issues, and can help address all your IRS tax debt related issues. To schedule your free consultation with Nick Nemeth, simply call (888)-890-0523. You can also share your tax issues through our contact form.