Can Bankruptcy Stop Wage Garnishment or Bank Levies?

 Posted on January 06, 2026 in Chapter 13 Bankruptcy

Filing for bankruptcy can stop wage garnishment and bank levies in most cases, often immediately. Bankruptcy triggers a legal protection called the automatic stay, which requires creditors to pause collection actions while your case is pending.

In 2025, federal court statistics showed that consumer bankruptcy filings increased nationwide as more households struggled with rising costs and aggressive debt collection. Many of those families were likely dealing with wage garnishment and account levies.

If your paycheck is being reduced or your bank account has been frozen, a Washington D.C. bankruptcy lawyer at Bloc One Services, LLC can help you understand how bankruptcy may provide fast relief and a path forward.

What Is Wage Garnishment and How Does It Work?

Wage garnishment happens when a creditor gets a court order that allows them to take part of your paycheck before you receive it. Your employer is legally required to withhold the money and send it to the creditor.

In Washington, D.C., garnishment often follows a debt lawsuit where the creditor obtained a judgment. Many people do not realize garnishment is coming until they see a smaller paycheck. Once it starts, it can make it difficult to keep up with rent, utilities, and other basic expenses.

What Is a Bank Levy?

A bank levy allows a creditor to freeze and take money directly from your bank account. Like wage garnishment, this usually happens after a court judgment.

When a levy occurs, you may suddenly lose access to funds needed for daily living. Automatic bill payments may fail, debit cards may stop working, and checks can bounce. The lack of warning is often what makes bank levies especially stressful.

How Does Bankruptcy Stop Garnishments and Levies?

When you file for bankruptcy, the automatic stay takes effect immediately, stopping most collection actions. Under 11 U.S.C. § 362, creditors must stop wage garnishments, bank levies, collection calls, and lawsuits as soon as the bankruptcy case is filed. This protection applies even if the creditor already won a judgment.

In practical terms, bankruptcy can:

• Stop ongoing wage garnishments after the filing date

• Prevent new bank levies from being issued

• Pause collection lawsuits and enforcement actions

• Force creditors to go through the bankruptcy court instead of contacting you

Timing is important. Money already taken before filing usually cannot be recovered, but future garnishments should stop.

Does Bankruptcy Stop All Types of Garnishment?

Bankruptcy stops most garnishments, but not all. Some debts receive special treatment under federal law. Under 11 U.S.C. § 523, certain obligations are not dischargeable. These may include child support, spousal support, and some tax debts. Garnishments tied to these obligations may continue or resume after the bankruptcy case. Still, bankruptcy may help by stopping other creditors and giving you breathing room to address priority debts.

Will Bankruptcy Protect My Bank Account Funds?

Bankruptcy can stop future bank levies, but funds already taken are often gone. If money was seized shortly before filing, there may be limited options depending on timing and the type of debt involved.

Exemptions also matter. Under 11 U.S.C. § 522, some funds in bank accounts may be protected, especially if they come from sources like Social Security or disability benefits. Proper documentation is important for preserving these protections.

Is Chapter 7 or Chapter 13 Bankruptcy Better for Stopping Garnishment?

Both Chapter 7 and Chapter 13 bankruptcy can stop garnishment, but they work in different ways. Chapter 7 is often faster and focuses on wiping out eligible debts. It is commonly used when income is limited.

Chapter 13 involves a court-approved repayment plan lasting three to five years and can help with catching up on debts that cannot be discharged. The right option depends on income, assets, and the type of debt involved.

Contact Our Bowie, MD Bankruptcy Attorney for a Free 30-Minute Consult

If wage garnishment or bank levies are affecting your financial stability, help is available. At Bloc One Services, LLC, we focus on practical solutions for real people. Attorney Hope Blocton is known as "The People’s Attorney" because her approach is relatable and centered on providing the local community with quality legal service at a fair and reasonable price.

Call 240-200-0076 to speak with a Washington D.C. bankruptcy lawyer and learn how bankruptcy may help protect your income.