When you fall far enough behind on your bills and finances, you may find that your Florida employer has no choice but to withhold some of your wages to pay off your debts. Called “wage garnishment,” the process enables your employer to withhold up to 25% of your earnings until you pay off what you owe your creditors.
Per Bankrate, about 7% of Americans are having their wages garnished at any given time. Some people having their wages garnished start exploring their options and considering the prospect of filing for bankruptcy. Does filing for bankruptcy put an end to wage garnishment, though?
How bankruptcy affects wage garnishment
If you are a first-time bankruptcy filer, something called the automatic stay period kicks in once you initiate formal bankruptcy proceedings. Most wage garnishments stop while the stay is in place, meaning you should be able to receive your full paycheck during the automatic stay period.
How multiple bankruptcies might affect wage garnishment
Things may work a bit differently if you have filed bankruptcy before, depending on when you did so. If you had another bankruptcy case within the past year, your automatic stay period lasts only 30 days. If you had two or more pending bankruptcy cases within the past year, there is not going to be an automatic stay period if you file for bankruptcy again.
Keep in mind that if you do decide to file for bankruptcy to put an end to wage garnishment, it does not affect some types of debts, including child support and spousal maintenance payments, among others.