QUESTION
Can the courts grant wage garnishment and put a hold on your full bank account balance?
Asked on Sep 25th, 2014 on Bankruptcy - Michigan
More details to this question:
We received a judgment and have to file bankruptcy. My husband is having his wages garnished until we can afford to proceed but the creditor also froze our bank accounts today. We have been borrowing money since we have no access to anything. Is there any shot we will get this money released if we do an emergency chapter 13?
6 ANSWERS
Derek W. Freeman
In answer to your first question, yes the courts can grant a garnishment of your wages and a levy of your bank accounts. Creditors are entitled to garnish up to 25% of your wages, and can freeze your bank accounts until they figure out how much they can take. It sounds to me like your accounts have been frozen, and not yet seized by your creditor. If that's the case, you may be able to get some or all of that money back by filing bankruptcy. As for filing an emergency chapter 13, you might end up in a worse situation if you do it wrong. Chapter 13 bankruptcies are fairly complicated and difficult to do on your own. I would hire an attorney to help you.
Answered on Oct 06th, 2014 at 12:44 PM
Maybe. It depends on the amount, etc. You need to meet with an experienced BK lawyer to get your questions answered. Any number of things can happen. I wuld advise a face-to-face meeting with a lawyer.
Answered on Sep 29th, 2014 at 12:29 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Money in that has already been garnished is probably lost forever. Bankruptcy won't help with that, although that money will be recovered in the bankruptcy and paid to through your plan. Depending on which state you live in filing Chapter 13 might defeat the bank account garnishment. Also, some or all of money in the account might be exempt, for example wages are exempt to a certain amount, if you cashed in your IRA those funds are exempt, Social Security benefits are exempt - among other things. You need to see an attorney.
Answered on Sep 26th, 2014 at 7:45 PM
In most circumstances, a bankruptcy filing would release a hold on your bank accounts. If you have pledged a bank account as security for a loan, however, it may not be that simple and you would have to address that as a secured debt in your chapter 13 plan.
Answered on Sep 26th, 2014 at 7:43 PM
Filing Chapter 13 ought to be able to get your funds released, but if the emergency Chapter 13 fails, you will be in a worse set of circumstances than you are in now. Make the commitment to understand what is required of a Chapter 13 & understand that if you file without an attorney, few attorneys will be willing to step in and ride to your rescue,
Answered on Sep 26th, 2014 at 7:42 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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A high probability, especially if you do it before the money is transferred to the creditor. See an attorney now.
Answered on Sep 26th, 2014 at 9:12 AM