If someone’s wages are being garnished, bankruptcy does the following two things:
1: Stop the garnishment through what is known as the Automatic Stay. The Automatic Stay stops all collection activity, including wage garnishment. If they collect after you filed bankruptcy, they are violating a federal law.
2: Recover the past 90 days of garnished wages. The person that filed bankruptcy gets their money back.
Section 522(h) and Section 547 of the United States Bankruptcy Code allows you to recover your wages that were garnished if there was over $600.00 in garnished wages.
The reason you can get the money back from the people that garnished it is because the garnishment was a preferential transfer. A preferential transfer means that a transfer occurred from you to the creditor (the garnishing) during a time you are presumed to be insolvent (the 90 days before filing bankruptcy). Therefore, the creditor was preferred over other creditors. A preferential transfer is not permitted.
If you or someone you know in the Houston area has his or her wages garnished, contact us at the Rashid Law Firm for a free consult (832)209-8833, we have experience in recovering garnished wages and have successfully recovered garnished wages. We would be glad to help you.