Wage garnishment occurs when a court mandates that your employer withhold a portion of your earnings to satisfy outstanding debts. While receiving a diminished paycheck is a significant financial blow, you possess a powerful legal shield if a debt collector has already initiated this process.
How bankruptcy stops garnishment
When you file for bankruptcy in Pennsylvania, an automatic stay takes effect. This legal injunction immediately halts most collection actions, including existing wage garnishment for consumer debts like credit cards and medical bills.
However, the stay has limitations. Garnishments for child support or alimony generally continue unaffected by the stay. Additionally, if you have non-dischargeable debt, garnishment may resume once the bankruptcy case closes.
Why the type of your filing matters
You have two options when filing for bankruptcy, which are Chapter 7 and Chapter 13. While both stop garnishment, they discharge underlying debt differently. Chapter 7 can wipe out your debts entirely, removing garnishment permanently.
Meanwhile, Chapter 13 involves a three to five-year repayment plan. The garnishment stops, and you pay back a portion of your debt through a court-approved plan.
How Pennsylvania law offers unique protections
In most states, if you owe a credit card company money, they can sue you. In Pennsylvania, the landscape is different. Most regular creditors cannot garnish your wages. Even if they sue you and win, they cannot force your employer to send them part of your check.
However, Pennsylvania law does allow wage garnishment for these obligations:
- Domestic support
- Unpaid rent for a residential lease
- Student loans
- Federal and state taxes
- Court-ordered payments related to a crime.
Even if a creditor cannot garnish your wages, they can still freeze your bank account once your employer deposits your paycheck. This makes the federal protection of bankruptcy vital if you have a judgment against you.
Taking the first step toward relief
While bankruptcy is a right designed to give honest people a fresh start, the filing process requires precision to ensure your assets remain protected. Consider consulting with a Pennsylvania bankruptcy attorney to learn more about your options.