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Another reason for individuals to file a bankruptcy case is that a creditor has obtained a garnishment on employment wages.  This means that the creditor is receiving (or will receive) a portion of the individual’s earnings every pay period.

In order for a creditor to garnish income, the creditor must first file a lawsuit against the individual.  In many cases, the individual never responds.  If that happens, the creditor receives a default, and later a default judgment.  Once the creditor has that judgment, it will attempt to collect on that judgment.  One of the easiest ways for the creditor to receive money is by taking it from a source that is consistent, such as a paycheck.

Once a garnishment is in place and final it can be very difficult to remove it.  One way to do so is to file a bankruptcy.  A bankruptcy filing creates an “Automatic Stay” that prevents the creditor from taking action against the individual, also known as the debtor, filing the case.  In many cases, the debtor can even receive money back that had previously been removed from a paycheck.