Often, by the time a person files for bankruptcy protection, they are in a position where a business or the court has garnished wages for repayment of a debt.  The type of garnishment varies – it can be for unpaid taxes, an unpaid loan, or for child or family support.  Whether or not a bankruptcy will stop a garnishment depends on the type of garnishment.  The short answer to the question posed above is that yes, filing for bankruptcy in Nebraska will stop garnishment.  There are exceptions, however, and those exceptions include taxes and court ordered child or family support.

Garnishments other than child support or taxes are court judgments.  A creditor obtains a judgment against a debtor with the court, and the court collects the money owed from the debtor, typically directly from the debtor’s wages. The creditor collects the money owed from the court at a specific time, called the return date.

A creditor can garnish your wages until the debt is paid.  When you file for bankruptcy, you are afforded protection from these types of garnishments. Section 362 of the Bankruptcy Code, the Automatic Stay, is a court order that requires your creditors to stop trying to collect debts immediately.

Although a garnishment will cease when you file for bankruptcy in Nebraska, it does not automatically eliminate the debt.  Once the debt has been discharged by the bankruptcy court, it will eliminate your creditor’s right to garnish your wages for that debt.  Some debts are not discharged though, such as child support, student loan debt, and some taxes.

Be aware, however, that depending on the type of bankruptcy you file you may still owe the creditor.  Under Chapter 7, the debt may be erased completely, and the garnishment will cease. If you file under Chapter 13, the debt may be negotiated down and you will still owe a certain amount of money to the creditor.

If you your wages are being threatened to be garnished or are already being garnished, please contact our Nebraska bankruptcy attorneys at 308-872-8327 for a free consultation.

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