Yes, garnishment will stop while you are in bankruptcy from that creditor. Trustee may want you under a wage order if you file a chapter 13. Best to hire a lawyer. Most bk attorneys do not charge for the 1st consultation.
The garnishment will stop either if you file Bankruptcy or the claim of exemption, as your income is very low. I am surprised with such a low income that any part of your wages are being garnished. Please review my legal guide on making a wage garnishment fair and livable, linked below. Certainly, the judge should grant your claim of exemption, due to low income.
Why did your boss sue you, is the bigger question. Was this a judgment that you should have appealed after losing in small claims court?
Robert Stempler (please see DISCLAIMER below)
NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review. The result portrayed for a client was dependent on the facts of that case. Results will differ if based on different facts. The Firm and Mr. Stempler are a debt relief agency. The Firm and Mr. Stempler help people file for bankruptcy relief under the Bankruptcy Code.
So you allowed a creditor to obtain a civil judgment against you. If you did not go to court, and you have a good excuse, you may want to file a motion to vacate the judgment. Before you do this, though, have a lawyer look at the judgment. Is it just a normal money judgment, or is it based upon fraud or embezzlement. If the creditor might claim that you committed some type of fraud, but the judgment does not so state, you may not want to vacate the judgment. You should consult an attorney and have the specific facts reviewed.
The garnishment will certainly stop. What happens to the money which was being garnished depends on who actually had the money at the time you filed the case (your bank account, the sheriff's office, or the creditor), which county you file your bankruptcy in, and which county the sheriff's office is in. There have been a few different decisions on whether levied funds in the hands of the sheriff's office are "property of the estate," but as long as they're listed properly in your paperwork, you should be able to get the money back so long as it hasn't already been turned over to the creditor when the case was filed (100% you get back any money which was in your account when you filed and taken after; 70/30 you get the money back if the sheriff is holding it when you file).
I'd recommend sitting down with an attorney.
Assuming EVERYTHING was done in Small Claims, the application for claim of exemption should have stopped the garnishment. Get an ORDER as soon as possible from the court to serve on the Sheriff. They will notify your employer to stay the exemption until the employer hears otherwise.
You REALLY need to speak with a lawyer; either bankruptcy, Small Claims, or collections. Try: www.smallclaimsappeals.com
Adam Jaffe Law Office of Adam Jay Jaffe 124 Lomas Santa Fe Dr, #204 Solana Beach, CA 92075 (619) 810-7964 www.smallclaimsappeals.com Adam@SmallClaimsAppeals.com This posting is provided for “information purposes” only and should not be relied upon as "legal advice". Nothing transmitted from this posting constitutes the establishment of an attorney-client relationship. Applicability of the legal principles discussed here may differ substantially in individual situations or in different states.
You were supposed to mail the original Claim of Exemption to the levying officer. Did you?
The levying officer should have instructed your employer to stop the garnishment as soon as the LO received your claim of exemption. Contact the LO to remedy the problem and obtain a refund for improperly garnished amounts.
As soon as you file your bankruptcy petition, ALL collections efforts must be automatically stayed (stopped) as soon as your creditors learn about the filing. Call the LO and your creditors (or their attorneys) as soon as you file your BK petition. Give them the BK case number and better yet, provide them with a copy of your Voluntary Petition.
If you appeared in any state court lawsuits (including the one we're discussing), you must fill out, serve and file with the court a Notice of Stay of Proceedings with a copy of your Voluntary Petition attached. (To find the form, do a Google search for "CM-180 Stay of Proceedings.") If you did not appear in any state court lawsuit, then the plaintiff (or its attorney) must file that form. When you notify the plaintiff/judgment creditor (or its attorney) about your BK filing, then request that he file the CM-180 Notice of Stay. He'll need a copy of your Voluntary Petition to do so.
Once the court clerk files the Notice of Stay, she will take the hearing off calendar, in which case you need not appear for the hearing. If you don't file BK before the hearing, then you must appear and bring documentation for your WG-006 Claim of Exemption with attached WG-007 Financial Statement.