Garnished Wage Recovery

[kornellred]

In a recent posting to this forum, the poster claimed to have been able to recover garnished wages for a period of 90 days prior to filing for bankruptcy. My understanding is that the automatic stay is effective on the date of filing and not before.

I have no reason to believe the poster was being less than honest, but this just baffles me. Can someone explain how this is possible?

[DesdemonaB]

Federal (11 U.S.C. sec. 547) Garnishments in excess of $600.00 within 90 days of filing bankruptcy are considered “preferential transfers.” If the garnished funds can be claimed as exempt property, then the garnished funds should be listed on Schedule B and exempted on Schedule C of the debtor’s bankruptcy schedules.

Whether the trustee would seek to recover this preferential transfer is unknown. If they do, you wouldn’t get the money back. If the trustee takes no action, then your attorney could seek to recover the garnished wages and therefore you should be sure to claim these garnished wages as an exempt asset in your bankruptcy schedules.

It's almost a catch 22 - if the total value is worth pursuing, the trustee will but if you have enough exemptions it would be kinda nice to have money back from a creditor. Of course you will have to pay your lawyer to get it back, in the case of the first poster it was a % of the total recovered.

[tobee43]

Federal (11 U.S.C. sec. 547) Garnishments in excess of $600.00 within 90 days of filing bankruptcy are considered “preferential transfers.” If the garnished funds can be claimed as exempt property, then the garnished funds should be listed on Schedule B and exempted on Schedule C of the debtor’s bankruptcy schedules.

Whether the trustee would seek to recover this preferential transfer is unknown. If they do, you wouldn’t get the money back. If the trustee takes no action, then your attorney could seek to recover the garnished wages and therefore you should be sure to claim these garnished wages as an exempt asset in your bankruptcy schedules.

It's almost a catch 22 - if the total value is worth pursuing, the trustee will but if you have enough exemptions it would be kinda nice to have money back from a creditor. Of course you will have to pay your lawyer to get it back, in the case of the first poster it was a % of the total recovered.

cool cite of the law!!!

[DesdemonaB]

Sore subject for me, my anti-pro se trustee drilled my on my garnishment, pre and post amounts asking for paystubs, garnishment release papers etc. at the end of the day she did not pursue and 144 wasn’t worth paying a lawyer to get back. I got my post BK refunds that = almost 800 and it didn’t cost me a dime.

[tobee43]

Sore subject for me, my anti-pro se trustee drilled my on my garnishment, pre and post amounts asking for paystubs, garnishment release papers etc. at the end of the day she did not pursue and 144 wasn’t worth paying a lawyer to get back. I got my post BK refunds that = almost 800 and it didn’t cost me a dime.

i understand, however your knowledge of the subject matter, if this helps you any...your experience really helps many people! thank you for paying if forward! and too cool it didnt' cost you a dime!! goes to show!

[DesdemonaB]

Thanks Tobee43

I am the first to admit that I was not the most prepared pro se filer, so when she asked about the garnishment I researched and found that I could have exempted the funds. The total amount garnished per filing was 744 so if she wanted the 144 I had no problem giving it to her. It’s all about choices.

We learn either by instruction or mistakes right now I feel like I have a PhD in mistakes.

[tobee43]

Thanks Tobee43

I am the first to admit that I was not the most prepared pro se filer, so when she asked about the garnishment I researched and found that I could have exempted the funds. The total amount garnished per filing was 744 so if she wanted the 144 I had no problem giving it to her. It’s all about choices.

We learn either by instruction or mistakes right now I feel like I have a PhD in mistakes.

LOL!! after filing pre se you do now have your PhD in Bk..LOL!!

i really appreciate the information! and truly hope others do as well, it's excellent!

[kornellred]

OK - I can understand how wage garnishments over $600 during the 90 days prior to filing is considered as a "preferential transfer". What I do not understand is how that money can be considered an exempt asset.
It seems to me that the possibility of recovery of garnished wages in excess of $600 during the 90 days prior to filing should be explored as a matter of protocol by bk attorneys. This should strike fear into the hearts of creditors who have obtained judgments and writs of garnishment.

[catleg]

It falls under the wildcard exemptions, especially if your state allows the federal exemptions.

[HHM]

In a recent posting to this forum, the poster claimed to have been able to recover garnished wages for a period of 90 days prior to filing for bankruptcy. My understanding is that the automatic stay is effective on the date of filing and not before.

I have no reason to believe the poster was being less than honest, but this just baffles me. Can someone explain how this is possible?

As pointed out, it has to do with the "preference" issue. The debtor cannot enforce a preference claim only the trustee.

Now, if the funds are exempt, you should have gone to state court (Where the judgment was entered) and raised your claim of exemption at that time.