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Garnishments and Bankruptcy

Garnishments and Bankruptcy in Indiana.  Protect yourself from Wage Garnishments!

If  someone is garnishing your wages, your income is much lower than it should be. Perhaps you were sued by credit card companies, a hospital, or a car company because you could not pay the bill.  Someone may have sued you after a slip and fall injury on your property or due to a car accident.  Even if you simply could not pay what you owe because you were laid off or are a negligent mortgage loan victim who can’t afford your monthly home loan payments, the creditor does not care!  And, unfortunately, the law allows creditors to take some of your income that obtain a "garnishment" order from a court.  

If  you are already having a tough time financially, the last thing you need is having your paycheck reduced.  It makes your struggle even worse.   Ignored, the situation goes from bad to worse.  Bankruptcy may be the smartest solution, because it will stop wage garnishment which will allow to meet your immediate and necessary needs - like food, utilities, rent/mortgage payment.   Filing a bankruptcy will put an immediate stop to garnishment of your wages and may even allow to recovery some of the garnished wages.  An experienced Indianapolis bankruptcy attorney or an experienced Kokomo bankruptcy lawyer can notify the judgment creditor, the court and your employer as soon as the case is filed and the judgment creditor will have to stop the garnishment of your wages.  

What is a garnishment?

A   garnishment is a legal means of attaching to the wdebtor to satisfy an unpaid debt.  Most garnishments require a court order directed to your employer.  However, the federal government may attach your wages directly in the case of student loan garnishments, tax garnishments and for social security overpayments.  If you work for the State of Indiana, the state government can garnish your pay for past due real and personal property taxes.  These are typically limited to a lower garnished amount than the  traditional garnished amount  of up to 25% of net, or "take home," pay (more for child support obligations).  Take home pay is your gross pay minus taxes (it does not deduct 401(k) deductions or insurance in the calculations).

How does bankruptcy stop garnishments?

The federal bankruptcy laws will stop debt collection including garnishments.  When you file bankruptcy (whether it is a Chapter 7 bankruptcy or a Chapter 13 debt reorganization), an automatic stay goes into effect that stops most collection activities.  Creditors won’t tell you about this federal bankruptcy protection (the "automatic stay") which immediately stops further garnishment for as long as the automatic stay is in effect,  even if the creditor has no knowledge of the bankruptcy filing!  This stay continues throughout your bankruptcy case unless terminated or modified by the bankruptcy court. 

What is the process?

As soon as a bankruptcy case is filed,  we immediately send a notice to your employer, the creditor (or their attorney) and the court that the bankruptcy automatic stay that immediately prohibits further garnishment.  Garnishment is ceased upon filing.  If you need the garnishment to stop right away, our office is prepared to assist you in filing an immediate emergency bankruptcy filing.  This may cost a little more, but it lets you get the stay in effect much faster and then gives you an extra 2 weeks after the emergency bankruptcy filing to get all of the somewhat complicated bankruptcy paperwork in order to complete your bankruptcy petition.

For most garnishments, the debt will be discharged (for more on Dischargeable vs NonDischargeable),  at the end of the bankruptcy case and the creditor  can never initiate any collection effort, including wage garnishment, ever again.

Recovery of Wages Garnished Prior to Filing Bankruptcy?

You  may be able to get back some of your wages garnished within the ninety (90) day period prior to your bankruptcy filing if they were over a certain threshold amount and you have enough exemptions so you keep the recovered funds. (To learn how exemptions work, see Bankruptcy Exemptions.)   If you meet the requirements (it must mean that money goes in your pocket),  we can file a complaint in your bankruptcy and demand that the creditor return the garnished wages. Whether this makes financial sense will depend on the bankruptcy chapter you have filed and the amount of wages you are looking to recover.

How do I get started?   

The first step in the process is finding an experienced Indiana bankruptcy attorney. Filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy will stop the garnishment and can keep creditors from continuing to try to collect on debt.  Many clients are only available on Saturdays, so we make ourselves available.  We welcome the opportunity to meet with you to talk to you about your situation at no charge. More than anything, we look forward to helping our clients get a fresh start so that they can start living their lives again.

Steven P. Taylor, P.C. | Kokomo and Indianapolis Chapter 7 Bankruptcy Lawyer

Contact the law firm of Steven P. Taylor, P.C. today in his Indianapolis Bankruptcy office at (317) 271-1111 or his Kokomo Bankruptcy office at  (765) 868-0807 for a free consultation about whether you should file for Chapter 7 or 13 bankruptcy to protect your wages in Indiana or email us your questions.   Steven P. Taylor will assist you in determining whether a bankruptcy is the best path for you, and will guide you through the bankruptcy process

Download Intake and Disclosures 

Download Required Document Checklist and Budget Worksheet

Prior to your first meeting with my office, please complete the above downloads. They can provide me with further insight into your financial situation and allow me to determine if bankruptcy is appropriate for you.

My practice serves individuals throughout Indiana, including Bartholomew, Boone, Brown, Carroll, Cass, Clinton., Delaware, Grant, Hamilton, Hancock, Hendricks, Howard, Johnson, Madison, Marion , Miami, Monroe, Montgomery, Morgan, Shelby, and Tipton county as well as the municipalities of Columbus,  Lebanon,  Zionsville,  Nashville, Galveston, Frankfort, Muncie, Gas City, Marion, Carmel, Cicero,  Fishers,  Noblesville, Sheridan, Westfield, Fortville, Greenfield, McCordsville, New Palestine, Avon, Brownsburg, Danville, Plainfield, Greensboro,  New Castle, Spiceland, Greentown, Hemlock, Kokomo, Russiaville, Franklin, Greenwood,  Nineveh, Trafalgar, Whiteland, Alexandria, Anderson, Elwood, Beech Grove, Camby, Castleton, Indianapolis, Lawrence, Speedway, Amboy, Bunker Hill, Converse, Miami, Peru, Bloomington, Crawfordsville Martinsville, Mooresville and Paragon.


We are a debt relief agency. OUR DEBT RELIEF LAWYERS help people file for bankruptcy under the united States bankruptcy code. IF YOU NEED DEBT RELIEF, OUR LAWYERS ARE READY TO HELP.