Stop Wage Garnishment in Memphis, Tennessee

Filing bankruptcy immediately stops wage garnishment in Memphis through an automatic stay issued by the bankruptcy court. Once a bankruptcy case is filed in the Western District of Tennessee, creditors must stop garnishing wages, bank accounts, and other collection actions.

What Is Wage Garnishment?

Wage garnishment occurs when a creditor obtains a court order requiring your employer to withhold a portion of your paycheck to pay a debt. In Tennessee, garnishment is commonly used for:

• Credit card judgments
• Medical debt
• Personal loans

How Much Can Be Garnished in Tennessee?

Understanding the Tennessee 25% Wage Garnishment Rule

If a creditor obtains a judgment against you, they can legally take a significant portion of your paycheck. Under Tennessee wage garnishment laws, most creditors are permitted to garnish:

• Up to 25% of disposable earnings, or
• The amount by which weekly earnings exceed 30 times the federal minimum wage, whichever is less

Disposable earnings means the money left in your paycheck after legally required deductions, such as Social Security, Medicare, and federal or state income taxes, are taken out.

For federal minimum wage calculations, 30 times $7.25 equals $217.50 per week. If your weekly disposable earnings are under that amount, general consumer debt garnishment is typically not allowed.

Tennessee law may also allow an additional exemption of $2.50 per week per dependent child under 16 who lives in Tennessee when the proper declaration is filed with your employer.

Example: If disposable earnings are $300 per week, then 25% is $75 and the amount over $217.50 is $82.50. The lower amount applies, so garnishment would be $75 per week.

Losing 25% of your take-home pay can make it difficult to cover basic living expenses like rent, mortgage payments, groceries, and utilities.

Special Debt Garnishment Limits

Some debts follow different rules and may allow higher withholding limits:

• Child support or alimony: Up to 50% if you support another spouse or child, or up to 60% if you do not. An extra 5% may apply when payments are more than 12 weeks behind.
• Federal student loans: Up to 15% of disposable earnings through administrative garnishment.
• Tax debts: IRS and state tax agencies use exemption formulas and dependent allowances rather than a fixed percentage.

How Bankruptcy Stops Wage Garnishment in Memphis

When you file bankruptcy:

• The court issues an automatic stay
• Creditors must immediately stop garnishment
• Employers must cease wage deductions

This protection applies to both Chapter 7 and Chapter 13 bankruptcy cases.

How the Automatic Stay Works

The Automatic Stay: Your Immediate Shield Against Creditors

The most powerful tool to stop a wage garnishment is the automatic stay. When you file for either Chapter 7 or Chapter 13 bankruptcy, federal law immediately triggers this injunction. As soon as Arthur Ray Law Offices files your bankruptcy petition with the United States Bankruptcy Court for the Western District of Tennessee, the automatic stay acts as a legal shield that requires creditors and collection agencies to halt collection efforts immediately.

• Instant Relief: The moment your bankruptcy petition is filed, the automatic stay goes into effect. It stops wage garnishments, harassing phone calls, vehicle repossessions, foreclosure sales, and many other collection actions.

• Employer Notification: Once your case is filed, your employer and the creditor’s attorney are notified that the stay is in effect. Under federal law, they must immediately stop withholding money from your paycheck.

• Court Enforced: Creditors who continue garnishing wages after receiving notice can face penalties from the bankruptcy court for violating the automatic stay.

Filing for bankruptcy can protect your next paycheck and give you room to regain control of your finances.

Chapter 7 vs Chapter 13 for Wage Garnishment

Both types of bankruptcy will stop a garnishment, but they work differently for your long-term debt:

Chapter 7 Bankruptcy

This “straight bankruptcy” can completely wipe out the underlying debt that caused the garnishment (like credit card debt or medical bills) in just a few months.

• Stops garnishment immediately
• Eliminates unsecured debt
• Case typically completed in 3–4 months

Chapter 13 Bankruptcy

This is a reorganization plan. In Memphis, many of our clients choose Chapter 13 because it allows you to stop the garnishment and pay back a portion of your debts over 3 to 5 years in an affordable monthly payment.

• Stops garnishment immediately
• Creates a 3–5 year repayment plan
• Useful for tax or mortgage-related debts

Can Bankruptcy Stop Bank Account Garnishment?

Yes. Filing bankruptcy also stops:

• Bank levies
• Account freezes
• Pending collection actions

Funds taken before filing may not always be recoverable, making timing important.

Will Garnishment Resume After Bankruptcy?

• In Chapter 7, garnishment typically ends permanently for discharged debts
• In Chapter 13, garnishment remains stopped as long as the repayment plan is active

Are There Other Ways to Stop Wage Garnishment?

Other options may include:

• Filing a Motion to Pay Out Rights (slow pay motion) under Tenn. Code § 26-2-216
• Filing a claim of exemption
• Negotiating a settlement
• Challenging the judgment

However, bankruptcy provides the fastest and most comprehensive protection.

Do I Need a Lawyer to Stop Wage Garnishment?

Because garnishment involves court orders and strict deadlines, many Memphis residents choose to work with a bankruptcy attorney to ensure garnishment stops quickly and legally.

The Memphis Bankruptcy Process

Because we have over 50 years of experience serving Shelby County, we understand the local court filing process. Filing your case correctly in the Memphis court is the fastest way to protect your paycheck and get your life back on track.

Don’t wait until your next paycheck is short. If you are facing a garnishment in Memphis, Bartlett, Germantown, or Collierville, contact us today.

Schedule Your Free Consultation

Call Arthur Ray Law Offices today at (901) 475-8200 to discuss your options and stop your wage garnishment now.

Memphis Bankruptcy Court Information

Wage garnishment cases are stopped when a bankruptcy filing is made with the:
United States Bankruptcy Court
Western District of Tennessee
Serving Shelby County

Written by: Tennessee bankruptcy attorney representing Memphis and Shelby County.

^*For those who qualify under federal law.