How Declaring Bankruptcy May Help You with a Wage Garnishment
Transcript:
Hi, I'm Matt McArthur, bankruptcy attorney at Clear Counsel Law Group. One of the most pressing issues I see on nearly a daily basis is the issue of wage garnishment. People come in all the time and ask, "What can I do about a wage garnishment?" In particular people are very curious to know whether or not they can get the money back from a wage garnishment if they file for bankruptcy.
In certain circumstances, we can actually get that money back. If we have filed your bankruptcy case and a payroll department or a creditor continues with the wage garnishment after we have filed your case, that is money that belongs to the bankruptcy estate and is most likely an exempt asset that will be returned to you. However, if the money has gone through the wage garnishment process and we file your bankruptcy after that money has been already taken, usually that money is gone.
In some situations, if the money hasn't been delivered to the creditor yet, we can get the money back but as a general rule of thumb, you probably want to consider money that has already been garnished before you filed as gone and any money that may unfortunately be taken after we file for bankruptcy as money that you can get back. The reason being is the moment we file for bankruptcy, a collections freeze goes into place. This collections freeze is known as the automatic stay of the bankruptcy code. It's a very powerful law.
Unfortunately sometimes it takes a little bit of time to get all parties noticed and stop the ball from rolling forward with the wage garnishment. People's payroll are typically run earlier in the week before pay day and once the pay day rolls around, it's after payroll has already been prepared earlier in the week. In other words, even if we're to file for bankruptcy before your pay day, there's a chance your payroll department may have already processed your check with the wage garnishment intact. It's then a matter of us getting that money back because we [would 00:02:12] file for bankruptcy and put into place the bankruptcy protections before the actual pay day when the money is supposed to be received.
This is absolutely something that is a time issue. We want to file your case as quickly as possible. If there is a ongoing wage garnishment, so if you are facing a wage garnishment, please come and speak with an experienced attorney and I'd be happy to help with you. Again, this is Matt McArthur at Clear Counsel Law Group talking to you about wage garnishments and getting your money back.
