HELP! Bank garnishment

[newlife1]

I filed Ch 7 2 days ago and immediately informed law office that garnished my bank acct and faxed the bankruptcy form to the civil court for the garnishment hearing today. I thought everything's ok yet when I checked the court's website tonight it says the money was paid to the law office. isn't this a violation of the stay? How can I get back my money?

[newlife1]

I will file Chapter 7 soon to get money frozen in my bank accounts? Will they automatically unfreeze my account or do I have to submit amotion or request to the court? When should I do this - after Meeting of Creditors or anytime after filing Ch 7?

[despritfreya]

I think you need to discuss this with an attny. Too many questions have not been answered by your post such as

1. Why was the money frozen?
2. Who instructed the bank to freeze it?
3. When was it frozen?
4. What bank?
5. What State?
6. Is there an exemption to protect the money from the bk Trustee - assuming the money is still at the bank?
7. How much money?

And the list can go on.

Maybe give us the details so that we can evaluate to see if we can assist.

Des.

[LadyInTheRed]

OP is in Virginia and the account has about $4,000 and was garnished by a judgment creditor. Virginia has a $5,000 homestead exemption (plus $500 per dependent) that can also be used as a wildcard. The OP has record a homestead exemption and a personal property exemption. OP's first post was a week ago, so the account has been frozen at least that long.

newlife1, have you consulted with an attorney? Have you filed anything in court?

[newlife1]

Hi! The moneythat was frozen january by wells fargo is made up of direct deposit salary in acct 1 so I assume I can ask for exemption as wage the 75% of it? in acct 2 I have money i transferred from acct 1 which is my payroll so is this also wages and I can exempt as wages the 75% of it? we have wage and wildcard (5,500) exemption in VA. I also got my salary yesterday but I haven't filed ch 7 yet, am I required to acct for it when I file ch 7 tom or tuesday? I have tax refund with me and I have been paying bills, buying grocery, etc. so I will exempt what's left of it. I also found out that a lien was attached by the same lawyer to my house. I read I can request at some point the trustee or judge to remove the lien. i hope i can do that. do i need a hearing for that? How abt the frozen money will they automatically unfreeze it because of the stay or do i need to ask for a hearing? Thank you. i am happy i discovered this website.

[newlife1]

I faxed the form and called lawyer feb 22 for the feb 24 hearing so I thought everything is ok. Will the judge revert his decision? can i get my money back?

[LadyInTheRed]

newlife1, I merged your thread with another thread of yours because it contains additional information. You aren't as likely to get as much help if you start new threads on the same topic and don't give much detail on your situation. Unfortunately, this forum has been a bit buggy and in the merged thread, the earlier thread ends up embedded under one post and I cant read the other posts. Hopefully, others can because I can't undo the merge.

despritfreya asked you some questions in your thread. I tried to answer some of them based on information you provided elsewhere, but all of his questions were not answered. He is a BK attorney and might be able to make some suggestions. If he asks more questions, be sure to answer them so he can try to help you.

I take it you didn't go to the hearing today? You really should have. Have you consulted with any attorneys? I'm guessing not because you never answer that question.

[newlife1]

Update. I had to fax again to the court and this time to the atty the bk notice. yesterday atty said they have released garnishment already and informed bank and court. i called the court and that's only when they searched faxes and found my copy. They said the atty's rep collected the money. When I checked my bank acct it became 0 already and the bank charged again garnishment fee $100 when to begin with because of the stay there should have been no turnover of funds. Atty said they will not get any money so will it be turned over to the trustee? How do I claim this money back? Also how about the garnishment fees collected from my bank account, can I get them back from the bank? Do I have to request adverse(?) hearing. I don't know actually what to do about it and what will happen next. I still have to submit my schedules and I will exempt the garnished funds as wages and wildcard exemption. I hav submitted bk docs pro se.

[LadyInTheRed]

If the bank says they turned the money over to the attorney's representative and the attorney says they will not get the money, then I suggest you ask bank or the the attorney who their representative is who has the money.

If you can't get whoever has the money right now to turn it over, it may be that you will have to get your schedules filed and wait until the trustee issues a report of no distribution to get the money back.

I don't know the answer to the question about the garnishment fee if it was assessed after you filed your petition. But, if it was assessed before you filed your petition and your account was overdrawn on the date you filed, then be sure to list them as a creditor so that the debt is discharged. I suggest you find somewhere else to bank.

[newlife1]

How will I get the money back when trustee says no distribution? Will it be automatic? You mean I will list bank as creditor and write in schedule c the debit/garnishment fees as exempt wages and wildcard money? Will they be ordered to return it to me? Also the bulk of the garnished money was money I transferred online from another checking acct where salary is directly deposited. will they oppose that thse are wages even if the paper trail is obvious that it really is wages except that i transferred to a second checking acct i use to pay bills? i was supposed to pay mortgage when the money was garnished. In secured debts schedule i included the lien the lawyer put on my house that i discovered in the clerks court. In the statement of intention i am asked what my plan about it is. for the house i pit i will reaffirm but for this lien I said will remove it. is this the correct way of answering it? i am asking because i am supposed to give the creditor a copy of the statemt of intention and they will see my plan to remove their lien. thanks for the guidance!

[newlife1]

Aren't the lawyer and wells fargo in violation for garnishing when there should be an automatic stay? i called lawyer 2 days before the hearing and informed the court same day.

[LadyInTheRed]

Aren't the lawyer and wells fargo in violation for garnishing when there should be an automatic stay? i called lawyer 2 days before the hearing and informed the court same day.

I at first thought that Wells Fargo was the bank where your frozen account is. But I think I misread your post. Is Wells Fargo the creditor?

You haven't been real clear about the timing. But, it sounds like you filed BK only a day or two before the garnishment was to become final. You are dealing with a large corporation and it is very likely that the right hand didn't have time to stop the left hand from proceeding. For a violation of the automatic stay to be actionable, the violation must be willful. Most creditors would probably turn the money over to you in this situation because they now know about the BK and don't want to be in violation of the stay. But, I suspect Wells Fargo will hold the money pending instructions from the trustee. If you were in the 9th circuit, that may not be the case. Here's an article talking about the 9th circuit ruling against Wells Fargo's practice of freezing the accounts of debtors who file BK: http://www.americanbar.org/publicati...g_current.html. While your situation is not the same as them freezing your account with them, Wells Fargo's policy to hold money on behalf of the bankruptcy estate would probably lead them to do the same with garnished funds.

The fist step is to determine who really has the money and tell that person/company that they are in violation of the automatic stay and must return the money to you. If they refuse, your next step will depend on why they say they don't have to return the money.

In the meantime, make sure you get your schedules filed before the deadline.

[newlife1]

no wells fargo is just where i bank. yes i filed 2 days before ganishment hearing. i thought calling their atty and faxing a copy of the bk notice to the court was enough. looking back i should have protected myself more by going to the meeting. Maybe if I attended the hearing then turnout would be different or will it be the same? the court said the atty showed up and collected the money. That's a violation unless they are wily that even if i informed them already they still went to court.maybe tomorrow i will hear from the bank. i suspect they will send money to trustee. i hope u and our friends can help answer my question re statement of intention. i am finalizing my schedules. thanks again

[LadyInTheRed]

It could be better for you that the money left Wells Fargo because they probably would have frozen it when you filed BK even if it had not already been frozen because of the garnishment.

I suggest you figure out who really has the money. It sounds like everybody is pointing their fingers at everybody else. If it is not Wells Fargo, you probably have a better chance of getting it back more quickly, by telling them they are in violation of the automatic stay and that you will file a complaint if they do not return the money to you.

[LadyInTheRed]

I missed your statement of intention question at first, as will a lot of people. I suggest you start a new thread for that question. I am not sure, but it sounds like your question has to do both with a voluntary lien, your mortgage and an involuntary lien, the one placed on the house by the judgement creditor. Be very clear in the details so you can get good answers. Also, use a good descriptive title, something like "Statement of Intentions re Mortgage and Involuntary Lien", if I interpreted your question correctly.

[newlife1]

i will do that monday. i thought the money goes directly to the trustee. if they return it to my acct and i could get it back am i correct i need to account for it becaus eit is supposed to be part of the funds trustee will handle?

[newlife1]

What i will do is call on monday the atty and wells fargo. yes the lien was involuntary but i read somewhere that i can request trustee that it be removed.

[LadyInTheRed]

i will do that monday. i thought the money goes directly to the trustee. if they return it to my acct and i could get it back am i correct i need to account for it becaus eit is supposed to be part of the funds trustee will handle?

You really do not want them to return it to the account. Wells Fargo will most likely hold it and wait for instructions from the trustee because that is their policy for account holders who file BK. Read the article I posted.

You want the creditor, attorney or representative, whoever has the cash, to pay it to you. If the funds are exempt, there is no reason the trustee should ever have it. If they aren't exempt, the trustee will ask whoever has the funds to turn them over.

Assuming the garnishment really was not final before you filed BK, then it is an asset that should be listed and exempted on your schedules. I think there is also a place on the petition to list recent garnishments.