Garnishments & Bank Levies
Protecting Your Income: Stop Wage Garnishments: The sooner the better normally.
When you file for bankruptcy, all debt collection actions and law suits (other some family law type proceedings) against you must stop immediately. This includes any Garnishments, lawsuits, repossessions, foreclosure, and creditor calls. With more than 33 years of experience, Bankruptcy Attorney Richard D. Granvold can help you get the financial fresh start you need.
Filing for Bankruptcy Stops Garnishment Instantly: Any creditor who has a judgment against you can garnish your wages or any bank account that your name is on. This means that if you have been sued for debt collection and the creditor won, the creditor can garnish your wages from your employer up to 25 percent of each and every one of your paychecks goes straight to the creditor from your bank account or any bank account your name is on. Upon filing, I will fax to your work’s payroll department a letter with a copy of the petition for their records and fax a copy to the creditors’ attorney.
You have 3 separate goals when being garnished which is why filing as soon as possible may affect each. First, your goal is to stop any more deductions from your paycheck earnings. Second, your employer normally holds the garnished monies until after 60 days is up and after that until they receive a court order advising the employer of where to send the monies and when. Thus, your employer should have on hand monies they have been deducting from your paycheck…monies which are an asset and should be listed as such in your bankruptcy. Thus, estimated monies being garnished is listed as an asset normally. And finally, third, it may be possible that if the creditor obtained more than $600 in 90 days or less (not one day more) before you file bankruptcy, or received monies without a court order from the employer, then those monies may be possibly recoverable also. Stimulus payments and 2021 child tax credit payments may possibly be exempt also but commingling with other monies on deposit can affect that issue too.
Although Judges may issue contrary opinions sometimes, one judge has ruled that the garnishment of a bank account constitutes a “transfer” on the date of service of the Write of Garnishment on the bank and thus the 90 days starts then and thus does not constitute a preference if the bankruptcy is filed more than 90 days later.
The key to the above is filing bankruptcy as quickly as possible absent sometimes valid reasons not to file yet. Bankruptcy Attorney Richard D. Granvold will advise you on any such garnishments on your bank or your employer. Deadlines exist so call now to obtain such advice.