Can they take my whole paycheck?

[justrock]

My paycheck is currently being garnished to the full extent of NYS law for a repo'd car that sold for much less than I owed. Another creditor got a judgment against me and froze my bank account. All that was in that account was the remains of my paycheck that got direct deposited.

Is there anything I can do?

I am now forced to file chapter 7, as another garnishment could cost me my job. Took the prefiling course on Tuesday night, waiting for my certificate. I will be filing pro se so you will be hearing a lot from me.

[lrprn]

Welcome to BK Forum, justrock - glad you found us.

My paycheck is currently being garnished to the full extent of NYS law for a repo'd car that sold for much less than I owed. Another creditor got a judgment against me and froze my bank account. All that was in that account was the remains of my paycheck that got direct deposited. Is there anything I can do?

This isn't much information to work with, justrock. When were the judgments won in court by your creditors? What were the judgments for? Are you aware of any other pending court actions against you? What state are you in?

Now that the consequences of the judgments have already legally been put in place, if the judgments were legitimate (and I assume they were), then bankruptcy is likely your only way out to stop further court actions against you related to your debt.

Have you talked to any bankruptcy lawyers yet about your situation?

[HHM]

In most states, garnishments of income (i.e. your paycheck) is a first come, first served process. The first creditor to garnish, gets the "full" garnishment allowed by law (typically 25%, but that amount varies from state to state).

Thus, more than likely, no other creditor can successfully garnish your wages. Also, your employer would be in a heap of trouble if they fired you over garnishments.

Levying against bank accounts is a different story. Whether, and how much, a creditor can levy a bank accout depends on your state's exemptions.

[justrock]

I guess I'm not being clear

The first judgment that is causing my paycheck to be garnished is legitimate. I was in a car accident a few years ago and was out of work for quite some time. My car was repo'd and the garnishement against my wages is for the amount that wasn't covered by the sale of the car.

That creditor is getting 10% of my wages through my employer. The REST of my wages go into my checking account through direct deposit, and someone else has frozen that account, effectively taking all of my wages. I do not know who that creditor is or if they have a legitimate judgment.

What I am trying to find out is if my wages are exempt when they are in my checking account, since they have already been garnished. I am in New York State, and I will be filing chapter 7 shortly without an attorney. I have cancelled any further direct deposits, but all my available funds are in the checking account and I can't pay my rent or anything else.

[treehugger1]

It appears that yoru checking account funds are in the account, but the account is frozen. It could be that the same creditor who is garnishing your wages has also locked up your checking account. If this is the case, or you find out who the other creditor/collector is, you need to immediately send them a letter (return reciept) stating that the funds in your checking accounr are exempt wages. Ask them to remove their hold. I've read on other posts that this can be a lost cause. Often, you need to get an attorney involved to force the bank or creditor to release your account.

It is great that you can stop the direct deposit to the account. The problem will be that if you set up another direct deposit to ao checking account it is likely some creditor/collector will find this account. If you can, go to money orders for checks. The other advice that was given to me is to open savings account and use that account to deposit a bit of my paper check and get the rest in cash. The reason for this is that generally banks won't report any account to chexsystems, etc that allow collectors to trace your account. I don't know if this is true but next week on my payday, I'm going to test the hypothesis that a savings bank will allow me to cash my payroll check.

The statutes in some states allow for termination of an employee if "more than one" garnishment is in place. In my state (Oregon) I can have dozens of garnishments backed up and an employer cannot terminate me. You migth do a search for your state garnishment laws and do some research. In Oregon, the penalties are quite severe when a employer terminates due to garnishment.

In the meantime, look up your state exemptions for wages held in a bank acccount and then you might try taking your paystub to the bank and arguing that the bank is "illegally" holding your exempt funds. I've heard that while a creditor/collector can access/freeze your accounts, you might still persuade the bank that the funds are exempt. The problem is that the bank has probably received a request from a creditor/collector along with a copy of a court order due to a judgment.

If at all possible, you might consider getting an attorney to help you out, with the frozen accounts and BK. They would immediately work to get you access to your account (at least I would hope.)

[justrock]

Thanks-- I'm going to go through the Sheriff's office. They are the ones who notified my employer of the garnishment. Maybe they can help. The bank my paycheck is drawn on is right across the street from my job, and they will cash my check with ID so I don't really need a bank account.

[JRScott]

What state do you live in?

Ask your company for a paper check rather than a direct deposit.

The savings account is a good idea.