Q: What happens to an active garnishment once bankruptcy is filed?
I filed for bankruptcy some years ago and I also had garnishment. Once the bankruptcy is filed, does the garnishment stop? And am I still liable for payments even if the bankruptcy is approved?
A: The garnishment stops and you are no longer responsible for any payments.
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At the moment you file for bankruptcy relief, regardless of Chapter, an automatic stay against any action against you or your (the Estate's) property is estopped, and usually courts say "of no legal effect".
But the key to what happens thereafter hinges upon whether the garnished funds/assets are deemed by STATE LAW (in your jurisdiction) to be collateral for a now secured garnishment indebtedness. Generally, perfected liens are not affected by a bankruptcy filing.
And (at least in PA) a garnishment is an ongoing process, so if, e.g., a bank account, the garnishment writ will reach future assets as well (there is no requirement for you to make future deposits, however).
Your best path is to confer without delay with an experienced bankruptcy attorney licensed to practice in your jurisdiction to answer these and related issues.
When you file for bankruptcy, an automatic stay immediately goes into effect. This stay halts most collection activities, including garnishments. The creditors are then prohibited from continuing with garnishment actions during the bankruptcy process. If your bankruptcy petition is approved and the debt underlying the garnishment is discharged, you are no longer liable for the payments, and the garnishment should not resume.
However, certain types of debts, such as child support, alimony, certain taxes, and student loans, may not be discharged in bankruptcy, and garnishments for these debts may continue or resume after the bankruptcy case is closed. It is important to discuss your specific situation with an attorney to understand how filing for bankruptcy would affect your garnishment and which debts would be discharged.
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