How To Stop A Garnishment

There are really only two effective ways to stop a wage garnishment. Chapter 7 and Chapter 13 bankruptcies both stop all garnishments immediately upon filing. This includes IRS and student loan garnishments.

The bankruptcy court issues an order as soon as a Chapter 7 or Chapter 13 is filed. This order is called the “automatic stay.” It immediately stops all action to collect a debt, including garnishments.

Creditors, municipal courts and employers all move immediately to stop garnishments when they get notice of the bankruptcy. Anyone who violates the bankruptcy court’s order can be seriously punished. Creditors and employers really pay attention to bankruptcy court orders.

Since bankruptcies now are filed electronically, most national creditors and quite a few local creditors have signed up to receive electronic notice of all bankruptcies filed by their debtors. This means that most of your creditors will get notice of your bankruptcy within minutes of your filing.

In Ohio, there is a third method of stopping a garnishment.  A “Municipal Trusteeship” is allowed by Ohio law. It is very rarely used and I only recommend it in special cases. In a municipal trusteeship, you simply arrange to pay your creditor through the clerk of the municipal court.

The amount paid to the creditor is the same, but your employer never hears about the garnishment if you file before the creditor sends notice to your employer.  To file a municipal trusteeship, one must go to the municipal court that has jurisdiction where you live and request the form from the clerk.  It is cheap and easy, but it offers no protection from creditors phone calls and other harassment.

Your attorney should call or fax notice of your bankruptcy to the appropriate people just  to make certain that all active garnishments are stopped immediately.

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