AAFES Garnishment: What You Need to Know 

Can Bankruptcy Stop AAFES Garnishment? 

So, how can you stop the AAFES from garnishing your wages and wreaking havoc on your credit score for years to come? If you file for Chapter 7 or Chapter 13 bankruptcy, you could eliminate your AAFES wage garnishment and the garnishment of your income tax refunds and set yourself up with a better financial position for the future.

When you file a petition for Chapter 7 or Chapter 13 bankruptcy, your creditors are required to cease all efforts to collect on your debts. This includes halting any involuntary wage garnishments for army veterans and refraining from making collections calls.

If you file for Chapter 7, your unsecured debts will likely be forgiven without you having to repay any of your creditors, including AAFES and Military Star.  Unsecured debts are debts that are not “secured” by collateral, such as a house that could be repossessed if you fail to make regular mortgage payments. Military Star Card and AAFES debt are examples of unsecured debt, which will likely be discharged when you file for bankruptcy protection, meaning that you are no longer personally liable for that debt.

If you file for Chapter 13 bankruptcy, you can also discharge your AAFES or Military Star debt. However, if you file a Chapter 13 bankruptcy case, you will be required to propose a repayment plan to your creditors. This means you will replace your involuntary allotment with a voluntary monthly payment that will continue for three to five years.  We attempt to place all of our clients in Chapter 7 bankruptcy cases, which does not include a repayment of unsecured debt, such as AAFES and Military Star.

It is important that you make at least the minimum payment to AAFES/Military Star until your bankruptcy case is filed. In order to prevent these creditors from starting to garnish you paychecks and income tax refunds.  After your case is filed, Erin Baker Shank will notify AAFES/Military Star in writing of your bankruptcy filing and on that day you can stop paying AAFES and Military Star and they will be prohibited under federal law from garnishing either your paycheck or your income tax refunds.

AAFES and Military Star are creditors whose debt can be discharged in both Chapter 7 and Chapter 13 bankruptcy cases.  Many clients believe that debt to these creditors “survives” the bankruptcy discharge, but that is not true.

You can learn more about the bankruptcy process through our educational videos.

How Erin Baker Shank Can Help You 

If you are experiencing financial difficulties because of AAFES debt or garnished wages, reach out to bankruptcy attorney Erin Baker Shank as soon as possible. Erin has over 40 years of experience helping thousands of Texans find relief from overwhelming debts and other challenging financial situations. Contact us today to get started with a free, virtual case review.

If you owe AAFES money, they can garnish wages and income tax refunds. WE DO NOT SUE AAFES; WE DISCHARGE DEBT OUR CLIENTS OWE AAFES BY FILING A BANKRUPTCY CASE.