Will Bankruptcy Erase a Wage Garnishment That’s Already Happening? What to Expect

Wage garnishment is one of the most distressing consequences of falling behind on debt. When a creditor starts taking a portion of your paycheck before it even reaches your bank account, it can feel like your financial life is spiraling out of control. But there is good news: bankruptcy can often stop wage garnishment—and in some cases, even allow you to recover wages that have already been taken.

At Wadhwani & Shanfeld, we regularly help individuals throughout Los Angeles and California who are dealing with the painful realities of wage garnishment. Many are surprised to learn how powerful bankruptcy can be in not only stopping the garnishment, but also in erasing the debt that caused it in the first place. If you’re in this situation, understanding how bankruptcy works may be your first step toward relief.

What Is Wage Garnishment?

Wage garnishment happens when a creditor obtains a court order requiring your employer to withhold a portion of your earnings to pay off a debt. It typically begins after a creditor files a lawsuit, wins a judgment, and then asks the court to issue a writ of garnishment. In California, most creditors can take up to 25% of your disposable earnings, although the percentage may be lower if it would leave you unable to meet basic living expenses.

Certain debts—like child support, student loans, or unpaid taxes—can sometimes lead to garnishment without a lawsuit. But most consumer debts, such as credit cards, personal loans, and medical bills, require court action first.

Once garnishment starts, it continues paycheck after paycheck until the debt is paid in full, unless something intervenes. One of the most powerful legal interventions is bankruptcy.

How Bankruptcy Stops Wage Garnishment

The moment you file for bankruptcy, the court issues an automatic stay—a federal court order that immediately halts most collection actions. This includes wage garnishment, even if it’s already in progress.

Once your bankruptcy is filed, your attorney can notify your employer and the court that issued the garnishment. In many cases, this results in garnishment stopping before your next paycheck. However, timing is key. If you file too close to payday, it’s possible the employer has already processed the garnishment for that pay period. But once they receive notice of the bankruptcy, they are legally required to stop withholding funds.

If your wages continue to be garnished after filing, this may be a violation of the automatic stay, and the creditor could be held legally responsible.

Will Bankruptcy Erase the Underlying Debt?

In most cases, yes—bankruptcy can eliminate the debt that led to the garnishment. This depends on the type of debt and the type of bankruptcy you file.

In Chapter 7 bankruptcy, most unsecured debts—like credit card balances, personal loans, medical bills, and old utility bills—can be discharged entirely. That means not only does the garnishment stop, but the creditor no longer has a right to collect on the debt at all.

In Chapter 13 bankruptcy, the debt may be restructured into a repayment plan over three to five years. Garnishments typically stop, and you regain control over your income, making monthly payments under court supervision rather than having money forcibly withheld.

Some debts, such as child support, alimony, most student loans, and recent tax debts, are not dischargeable in bankruptcy. However, even for those debts, Chapter 13 can help you structure a manageable repayment plan and stop the garnishment while the plan is in place.

Can You Recover Wages Already Garnished?

This is a common and important question—and the answer is yes, sometimes.

If you file for bankruptcy and meet certain conditions, you may be able to recover wages that were garnished within the 90 days before your bankruptcy filing. To qualify, all of the following must generally be true:

• The amount garnished within that 90-day period totals at least $600
• The garnishment was for a dischargeable debt (like credit cards or medical bills)
• You have enough exemptions available to protect those recovered funds in bankruptcy

This process often requires filing a motion with the bankruptcy court, and it’s not automatic. But with an experienced attorney, many individuals can get back some of the money that was taken from them in the months leading up to their filing. At Wadhwani & Shanfeld, we evaluate every client’s garnishment history to determine whether recovery is possible.

What If the Garnishment Is From a Judgment?

Many people assume that once a creditor gets a court judgment, nothing can stop the garnishment short of full payment. But bankruptcy can eliminate judgment debts too.

If a creditor has sued you, won, and is garnishing your wages based on that judgment, a Chapter 7 bankruptcy can still discharge the underlying debt—unless it involves fraud, willful injury, or another exception. Once the debt is discharged, the judgment is no longer enforceable, and the garnishment must stop.

If the creditor has also placed a lien on your property based on the judgment, your bankruptcy attorney may be able to file a motion to avoid the lien, depending on the value of your assets and exemptions.

Don’t Wait Too Long to Act

Time is a critical factor when dealing with wage garnishment. Every paycheck that goes out the door is money you may not get back—and the longer you wait, the fewer options you may have to recover funds or protect your income.

Filing for bankruptcy is a serious decision, but for many people, it is the most effective way to stop the bleeding, eliminate overwhelming debt, and rebuild financial stability. At Wadhwani & Shanfeld, we know how to use bankruptcy strategically to stop garnishment, end creditor harassment, and create a path forward tailored to your situation.

Contact Wadhwani & Shanfeld

If your wages are being garnished and you feel trapped, you don’t have to face it alone. Bankruptcy may offer immediate relief and a permanent solution. At Wadhwani & Shanfeld, our experienced Los Angeles bankruptcy attorneys are here to help you understand your options, protect your income, and regain control over your financial life. Contact us today for a free consultation and take the first step toward stopping wage garnishment and eliminating the debt behind it.

Sources:

selfhelp.courts.ca.gov/guide-earnings-withholding-orders-employers

upsolve.org/ca/wage-garnishment