Debtors who are having their bank accounts or wages garnished may be able to stop garnishment by filing bankruptcy. Whether the garnishment can be stopped depends on the reason for the garnishment. Garnishments due to collection of judgments, collection of student loan debt, tax liability, and arrears due to domestic support obligations can all be stopped by filing Chapter 13 bankruptcy. However, garnishments due to ongoing domestic support obligations that are court-ordered will not be stopped by filing bankruptcy. In some circumstances, bankruptcy filers may even be entitled to get back funds that have already been garnished.
However, filing bankruptcy to stop a garnishment does not necessarily mean the debt will not have to be paid. Domestic support obligations, income tax liability, and student loans are usually nondischargeable, meaning that they will have to be paid back eventually. In chapter 7 bankruptcy the garnishments stop for the duration of the bankruptcy, which is usually three to four months. In chapter 13 bankruptcy, garnishments stop for the entire three to five years, but child support arrears and income tax must be included in the chapter 13 plan, meaning they get paid back over the course of the bankruptcy in the debtors chapter 13 plan. Usually this repayment is stretched out over a longer period of time than the repayment plan under the garnishment which allows debtors to pay less per month than they were when the debt was being garnished. Student loan garnishments are stopped as well, and repayment of the debt may be deferred until the bankruptcy case is completed, unless the debtor has sufficient funds to pay student loan creditors in the bankruptcy.
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