Bankruptcy and Wage Garnishment in Grand Rapids

Lenders have a variety of options for collecting what they are owed. One of the most intrusive tools available to them is wage garnishment, which involves actively capturing a portion of your wages from each paycheck to pay down your obligations.

If you are considering bankruptcy, putting a halt to wage garnishments is one of many potential benefits. Our dedicated attorneys can answer your questions about how bankruptcy and wage garnishments in Grand Rapids work together.

Understanding the Garnishment Process

Wage garnishment is a legal mechanism that allows creditors to collect debts directly from a person’s paycheck. In Grand Rapids, the process begins when a creditor obtains a court judgment confirming that a debt is owed. Once the judgment is entered, the creditor can request a writ of garnishment, which authorizes an employer to withhold part of the debtor’s wages. The employer must then send the garnished amount directly to the creditor or a court officer until the debt is paid in full.

Before garnishment begins, the debtor is typically notified and given an opportunity to object or request an exemption. Michigan law limits how much of a person’s income can be taken, usually no more than 25 percent of disposable earnings or the amount exceeding 30 times the federal minimum wage, whichever is less. Certain income sources, such as Social Security benefits or unemployment compensation, are generally exempt.

The garnishment process can continue for months, creating serious financial strain and making it difficult for individuals to cover basic expenses. Understanding how garnishment works is essential for identifying options to stop or prevent it, such as negotiating with creditors or seeking relief through bankruptcy protections.

What Happens to a Garnishment After Filing for Bankruptcy?

For many people considering bankruptcy in Grand Rapids, the prospect of halting existing wage garnishments is one of the biggest benefits. When you file for bankruptcy, you immediately gain the protection of something known as the automatic stay. The automatic bankruptcy stay prevents your creditors from making any attempt to collect your debts for as long as it is in place.

Thanks to the automatic stay, any existing wage garnishments must immediately cease. Once your employer is notified of the filing, they will no longer withhold a portion of your paycheck. What’s more, creditors are also barred from issuing new garnishments while the stay is in effect. This protection extends beyond garnished wages, as your creditors are barred from making any attempts to collect your debt. They may not file collection lawsuits, seize bank accounts, or call you about your obligation.

Of course, the automatic stay will not last forever. It can come to an end naturally once your bankruptcy concludes following a discharge. In most cases, garnishments will not continue after the bankruptcy because the underlying debt has been discharged. However, there are ways for creditors to get relief from the automatic stay in certain situations, even while the bankruptcy case continues. Our attorney can help you understand your options in these scenarios.

Talk to a Grand Rapids Attorney About Bankruptcy and Wage Garnishment

There are many benefits that come with filing for protection under the bankruptcy code. If you are struggling with debts and missing out on your full paycheck due to a wage garnishment, it is critical for you to consider your legal options right away.

Our attorneys can help you determine the right approach. If you have questions about bankruptcy and wage garnishment in Grand Rapids, now is the time to contact our firm get answers during a private case evaluation. We can file for bankruptcy on your behalf for $0 down. Visit our debt calculator for an immediate overview of your options.