How to File Chapter Seven for Garnished Wages

When you get so far behind on your bills that your creditors start garnishing your wages and your bank account, you need to take action. The fact that you have been unable to pay your bills up shows that you cannot afford to give up a huge chunk of your income to this particular creditor. One of the quickest ways to halt the garnishment of your earnings is to file a bankruptcy petition. After you file your Chapter 7 bankruptcy petition, the bankruptcy court will order all of your creditors to cease all collection actions, including garnishment.

Instructions

1. Seek credit counseling. Before you can successfully file for Chapter 7 bankruptcy, you must attend a credit counseling session with a government-approved agency. Credit counseling must be done within the 180-day period prior to filing your Chapter 7 petition.

2. Determine if you qualify for Chapter 7 bankruptcy by taking the means test. Begin by comparing your family income to the median family income for a family of your size in your state. If your family income falls below the median family income for your state, then you are in the clear. You can file for Chapter 7 bankruptcy. If your family income is above your state's median family income, calculate your monthly disposable income.

3. Calculate your monthly disposable income by deducting your allowable monthly expenses from your monthly income. If your monthly disposable income is $166.66 or less, you can file for Chapter 7 bankruptcy.

4. Create a creditor matrix. Include each of your creditors on the creditor matrix. Disclose the name of the creditor, the last four digits of your account number and the address of the creditor. Be sure to include the name and the contact information for the creditor that is garnishing your wages. Otherwise, the creditor will not receive notice that you have filed for bankruptcy, not receive the court order for relief and may continue to garnish your wages without that information.

5. File your bankruptcy petition, bankruptcy forms and creditor matrix in the bankruptcy court serving your district. You must pay a $299 filing fee to file your bankruptcy petition, and you must file the bankruptcy forms within 15 days of filing your bankruptcy petition. Once you have filed your Chapter 7 petition, the bankruptcy court will send an order for relief out to all of the creditors you have included on your creditor matrix. The order for relief renders the garnishment of your income automatically stayed.

Tips & Warnings

• Employ an experienced bankruptcy attorney to prepare your case.

References

• Southern Illinois University Law Journal: Living With the Means Test
• U.S. Courts: Chapter 7
• Bankruptcy Court for the Western District of Wisconsin: Creditor Matrix