Does bankruptcy actually stop a garnishment?

  • Clients wanted to file today (Friday) to stop a garnishment on Tuesday.

    Technically, filing today stops the garnishment.  The moment we file, there is an Automatic Stay, which stays (stops) any collection proceedings, including garnishment, repossession, and even foreclosure.  (11 USC § 362 – Automatic stay).  However, notifying payroll can be a bear.

    Since this client works for a multi-national corporation, his Utah office’s payroll is processed in San Jose, California, with a phone tree that led me to 8 different people, none of whom could even give a fax number or email for payroll.

    Client eventually found an old email from a payroll administrator, and I was able to send off a stop-garnishment letter, but unless you have good contact information for payroll, the garnishment still gets processed, and then it takes weeks for me to get it back from the creditor.

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