BANKRUPTCY STOPS GARNSHMENTS

Garnishment Basics

After a creditor obtains judgment, it will begin to enforce its judgment using the judicial system. In most instances the creditor will obtain Garnishments Orders from the court where it obtained its judgment.

Garnishment is a form of judicial collection whereby the creditor seizes property of the debtor which is being held by a third party. Most commonly, this would be an instance where the creditor garnishes wages held by an employer (wage garnishment) or a bank account of the debtor.

A judgment creditor can obtain a wage garnishment order and serve it upon the debtor's employer. The employer will then be required by law to withhold a portion of the debtor's wages and to pay it to the judgment creditor. The wage garnishment is subject to the debtor's rights to claim the wages exempt. Typically the amount which the employer is required to withhold and pay the judgment creditor is 25% of the net income of the debtor. Wage garnishments are continuing – meaning that the wage garnishment order will apply to all future payrolls until the judgment is satisfied.

A judgment creditor can also obtain a garnishment order and serve it upon the bank where the debtor holds his account. The bank is then required by law to freeze the account for the amount of the judgment and (also subject to the debtor's exemptions) pay the funds in the bank account to the judgment creditor to satisfy the judgment.

In both instances, the filing of a bankruptcy by the debtor will immediately stop the garnishment process – and may enable the debtor to recover past garnishment seizures from that judgment creditor.