QUESTION
Am I eligible for a refund on garnished wages if I file for bankruptcy?
Asked on Jul 30th, 2011 on Bankruptcy - Virginia
More details to this question:
I have received a Default Judgment against me for unpaid credit card debt in amount of $16K and my wages are now being garnished 25% every pay-period (twice monthly) effective July 2011. QUESTION: If I file Chapter 7 BK in August 2011, will I be able or entitled to receive a refund for the "already garnished portion amount" deducted from my paycheck since the garnishment is active and in effect 90 days "prior to" my Chapter 7 BK Filing in August 2011? Or does this 90-Day Rule regarding "refunds on garnished amounts" only apply to residents of some states?
9 ANSWERS
As long as it exceeds $600 and you list it on schedule B and exempt it on schedule C.
Answered on Aug 02nd, 2011 at 9:45 AM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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When wages are being garnished prior to bankruptcy, filing will automatically stop it. It is a voidable preference for the 90 days prior to filing and it is the trustee who is entitled to recover the payments. The trustee might help you recover this if you claim an exemption for the amount garnished.
Answered on Aug 02nd, 2011 at 9:38 AM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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You will get back whatever the Sheriff still has in his/her possession when you file the bankruptcy case assuming you can exempt the amount garnished in your bankruptcy petition. The amount transferred to the creditor by the Sheriff before the bankruptcy filing date can be obtained if the Trustee does not claim it. If not given back voluntarily by the creditor then you have to file an adversary proceeding (a bankruptcy lawsuit) to get the money transferred by garnishment to the creditor in the 90 days before filing the bankruptcy case.
Answered on Aug 02nd, 2011 at 7:26 AM
Glen Edward Ashman
First of all, get a lawyer. Not all garnisheed funds are recoverable. And even if they are, it sometimes may be your Trustee who recovers them and pays them to other creditors. The answer will depend on the amount garnisheed, what has happened since to those funds, what you can exempt (and a good attorney will know how to maximize exemptions), etc. Even a day or two may affect what you keep and get back as money still with your employer may be easier to recover. So see a lawyer not tomorrow but today.
Answered on Aug 02nd, 2011 at 7:04 AM
Garnished wages are refunded only if taken after filing for bankruptcy. A Chapter 7 Trustee may be able to require turnover of funds garnished prior the petition date, but you personally would not receive a refund.
Answered on Aug 01st, 2011 at 1:21 PM
Chapter 13 Bankruptcy Attorney serving Beaverton, OR
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Law Offices of Alexzander C. J. Adams, PC
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You cannot get a refund on this. However, all future garnishments will stop. The 90 day rule is in place for the trustee to reclaim the funds and distribute them to the creditors, but not to give back to you.
Answered on Aug 01st, 2011 at 1:14 PM
judith runyon
Only the amount being still held by the Sheriff and with the Chapter 7 Trustee's approval and release and if you exempted them.
Answered on Aug 01st, 2011 at 1:10 PM
Debtor's Rights Attorney serving Atlanta, GA
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Theodore N. Stapleton, P.C.
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You may be able to recover the funds garnished in the 90 days prior to filing as a preference but you would have to exempt those funds so that they don't go into the bankruptcy estate.
Answered on Aug 01st, 2011 at 12:51 PM
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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If you're in VA, you can get a refund of garnished wages as long as bankruptcy is filed before the Return Date noted on the Summons. It should be more than a day or two before, as well. A lawyer can get it done faster and with fewer headaches.
Answered on Aug 01st, 2011 at 12:45 PM