Question regarding garnishment

[shadowb]

Does anybody know particulars on garnisment, i.e. how much can the trustee require be deducted from one's paycheck, or how much are they required to leave a person in their paycheck? Also are benefit deductions protected, i.e. should they be paid before the garnishment.

[wayne-o]

HHM, one of the moderators just posted a sticky about garnishments in the collections section of the forum. Perhaps you can find the info you need there.

[shadowb]

Thanks Wayne. I read that and while it gave SOME guidelines, it did not answer my questions. See my post on the board regarding benefit deductions being affected by BK payment. My employer is quite upset because of my situation. My post on that topic should explain what is going on. I didn't want to get in detail again. My attorneys could have headed this situation off and they didn't. I warned them when we filed this would happen if they didn't protect my paycheck. They didn't listen to what I was telling them. My employer is also concerned because the amount ordered by the trustee (new amount imposed without my prior knowledge with a one to two day notification) is exceedingly above what I make in a month. Because it exceeds my pay it has kicked in first and half my benefits weren't paid this go round. It could be worse next time when the computer roles with the garnishment order. The employer called and requested the trustee to change this as it is going to cause problems from here on out. To my knowledge they have not heard back from the trustee. In the meanwhile I have tried contacting my attorney regarding this to no avail. Note my husband has self paid our payments as far as his portion goes and we are current with our payments.

[lrprn]

Shadow, how the trustee is paid the Ch 13 payment varies a great deal between trustees. There's no hard and fast rule about it. Some trustees allow you to pay by personal check (ours does), others insist on garnishment out of one paycheck as yours wants.

If you need to have your payments set up a certain way so that you can pay for your insurance, then tell your lawyer to it's time to discuss realistic payment options with your trustee. It is possible to petition the court to force the trustee to accept payments in a way that works for your unique situation - other Ch 13 filers have done it successfully.

[wayne-o]

I read your other post about the benefits....I hope you can get this worked out. Might be time to go to the lawyers office and have a seat until he helps you.

[shadowb]

Thanks Wayne and Irprn. Our court appearance is tomorrow. I have yet to hear from my lawyers...of course it is Tuesday and the phone calls from my employer happened yesterday and I know on Monday my lawyers are in court all day. I am hoping with tomorrow being one of our meetings with the trustee, they return my call. I prayed and crossed fingers last night that hearing from my employer regarding this issue will help. I have discussed with my husband the advice on this board regarding petitioning the court, and we have decided that if my payroll issues are not resolved by the close of business today, we are going to take advantage of having the trustee in the room with us tomorrow as well as one of our attorneys and we are going to ask for that petition. We feel our attorneys have not done their job as they could have prevented this in January. When I voiced my concerns as mentioned in my other post, one gave me a spill about how she didn't even have insurance and basically insinuated that I shouldn't be concerned about this matter. What I am not understanding is what the trustee is thinking in doing 100% garnishment from me, leaving me zero money disposable out of my check and I am worried whether or not any of my benefits will be paid next month. I don't trust my attorneys to look after our best interest, and we are even looking at claiming incompetence on them, finding another lawyer.

[HHM]

Interesting, the trustee is already requesting payroll deduction before there is even a confirmed plan.

Although you may be dissatisfied with your attorney's, you do have to realize this payroll issue is a "practical" problem, not a "legal" problem.

What benefits, "exactly" are being deducted and did you include those deductions as expenses on Schedule J.

In any event, if the trustee does not come-around voluntarily, you will probably need to file a Motion with the Court (which means additional attorney's fees for you).

[shadowb]

Well, we are newbies to this obviously and we did it very quickly because of the IRS. Anyway, the trustee apparently likes that payroll deduction. At our meeting with the attorneys when we filed, the attorney said "it doesn't matter where the money comes from, as long as it gets paid". At this meeting I had the copies of my paystubs and told the attorney that I had to have X amount in to cover my benefits. Our attorneys structured the payments to come a portion from mine and portion from my husband's (both covers the whole payment). This paycheck the medical and dental got covered, but my 401K, disability and a health rider did not get paid. These deductions were indeed included but I will double check.

You mention the above idea. I wonder if my attorney is counting on that extra fee which is why they have done squat to correct this issue.

Is it abnormal for the trustee to demand payroll deduction before confirmation? I live in Louisiana...maybe it is different here. Anyway, my employer did place a call yesterday to the trustee. They talked to the trustee's clerk and was told the message would be passed on.

[HHM]

I think you will be all right, I understand your anxiety. When push comes to shove, I do not think the trustee can "insist" on a payroll deduction when that deduction would impair rightful and allowed benefits to accrue to the debtor. The BK code is silent on the issue of method, so although the code requires the debtor to cooperate with all reasonable requests of the trustee, you have a fair argument that this particular request is unreasonable.

In any event, see how it goes and report back to us, we are very interested to see how this issue gets resolved.

[arkienurse]

Interesting, the trustee is already requesting payroll deduction before there is even a confirmed plan.

HHM, our payroll deduction began before we were confirmed also. In fact, I had my payments deducted for almost a year before we were confirmed.

[lrprn]

In Ch 13 nowadays, the trustees that do require that payments be made only through payroll deduction often recommend starting the wheels rolling with the filer's employer as soon as possible after filing - even before the 341 meeting. It's easier to change the amount afterwards if needed than get the whole shooting match started up in the first place.

So many employers take so long to ram the paperwork through Human Resources, etc. and get the checks reliably started to the trustee, it almost takes an act of God to get the process started and functioning smoothly

[shadowb]

Well, yesterday was our day in front of the judge. Our judge is great, trustee is well....we aren't going to post our ideas on her. Anyway, my attorney mentioned (per my request...I asked her if we could address it in front of the court since the judge was being quite helpful in all the other cases and she said sure that would be okay) to the judge that there were some payroll issues and then she let me explain (my husband gets upset and says he will speak but when the time comes he won't), so I explained to the judge that with the payroll deduction from my check being $2100 per month and I only make $600 per month, it was causing problems for the computer that does the deductions and that my benefits were not paid this pay period. The trustee tried to argue saying it should have been. My attorney said it wasn't and said she saw a copy of the check stub to this effect. I told the judge that my employer's solution was to drop that amount back to the previous amount and it wouldn't cause the problem. The trustee balked at that idea (the greedy *****), so the judge ordered her to send my employer a letter requiring them to cover my benefits. I don't think this is still going to help. It has something to do with their program and how things roll out the check. At least that was the way they explained it. At this point we are now just deciding do we really want to go round and round. Our original deal was enough payroll deduction from my husband to cover the majority of the plan payment with the balance coming from him. He has turned in three of those payroll deduction forms and still that is not happening. What has happened is the trustee has gotten antsy about the whole payroll deduction (we just filed in January and in a three month period she has upped my PD). She just isn't giving it time to allow my husband's to take place. I am hoping if we can get his to happen, she can drop ours. I just see this though as being an ongoing issue.

[shadowb]

I did provide my attorney and the trustee with a letter from them, which I faxed to their offices the night before. Apparently neither one went to their offices the next morning, so didn't have it with them and my hubby left our copy in the vehicle, so we didn't have anything to give to the judge. I am hoping though this letter may help my trustee. Though, I am not too hopeful. She criticized my employer's computer system and said that seemed like they needed to work on it. So, I don't think she will change.

[HHM]

I do have to sympathize with the trustee on this one...if your HR person is using the payroll computer as an excuse, is really just covering up her own incompetence, and same goes for your husbands employer, there is NO way it should take this long for them to initiate a payroll deduction.

In any event, I am glad the judge sided with you. From my perspective, and it appears from the judge's perspective that this is a "practical" problem that can be solved, and is not a "legal" problem. I think most judges are sympathetic to judges, and worse case scenario, I bet this judge would even let you simply cut a check directly to the trustee.