pay roll department and garnishment of wages

[blum1176]

we filed chapter 7 on the 30th of April. after my wife spoke with her payroll dept they sated that they need a release from the creditor who is garnishing our wages. is this correct? shouldnt the Notice of filling stop all collection activities?

I faxed a copy of the notice to the CA that is garnishing us as well. what else do i need to do?

[AngelinaCatHub]

we filed chapter 7 on the 30th of April. after my wife spoke with her payroll dept they sated that they need a release from the creditor who is garnishing our wages. is this correct? shouldnt the Notice of filling stop all collection activities?

I faxed a copy of the notice to the CA that is garnishing us as well. what else do i need to do?

Yes! This is my understanding about all I have been reading for the last two years. I'll pull the law or lawyer advisory in a minute. 'Hub

[AngelinaCatHub]

Automatic Stay

The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. 11 U.S.C. 362.

In Chapter 13, the stay even protects co debtors who are liable with the debtor on consumer debts.

The automatic stay gives the debtor protection from his creditors, subject to the oversight of the bankruptcy judge, and brings all of the debtor's assets and creditors into the same forum, the bankruptcy court, where the rights of all concerned can be balanced.

The '05 amendments to the Bankruptcy Code instituted limitations on the duration of the stay in the case of repeat filers: debtors who had a prior case pending in the last year which was dismissed get a stay of 30 days; debtors with two or more cases pending in the past years but dismissed get no stay at all. The debtor in those situations must seek a stay from the court in order to have the protection of the automatic (or not so automatic) stay. Here's a technical outline of the changes.
Prohibited acts

The automatic stay prohibits

* Beginning or continuing law suits
* Collection calls
* Repossessions
* Foreclosure sales
* Garnishment or levies

The automatic stay remains in effect until

* a judge lifts the stay at the request of a creditor;
* the debtor gets a discharge; or
* the item of property is no longer property of the estate.

Thus in Chapter 7, the stay may prevent immediate foreclosure on a debt secured by real estate but the stay will expire, and the creditor freed to proceed, when the debtor gets a discharge. (This assumes that there is no non exempt equity in the property for the bankruptcy estate.) In Chapter 13, the stay remains in effect for the life of the Chapter 13 plan.

More on how a creditor gets relief from the automatic stay

Stay permanent upon discharge

When the debtor gets a discharge, the automatic stay is replaced by a permanent injunction prohibiting creditors from all of those actions with respect to discharged pre petition debts that the automatic stay prohibited. More on the nature of the bankruptcy discharge.
Outside the stay

The automatic stay does not stop the following:

* Criminal proceedings
* Actions for a family support order or the modification of such order
* Actions to collect support from property that is not property of the estate
* Tax audit, demand for tax returns or assessment of tax (collection of tax is still stayed: the tax authorities, to their chagrin, are subject to the stay, just like other creditors).

Violations of the stay

Anyone who willfully violates the stay in the case of an individual is liable for actual damages caused by the violation and sometimes for punitive damages. Some courts confine the right to damages to individual debtors and deny damages for stay violations as to corporate debtors.

Since the court usually takes several days to several weeks to mail creditors notice of the bankruptcy, it is incumbent on the debtor or debtor's counsel to give actual notice to creditors who might take action without knowledge of the stay.

Creditor actions taken after the stay is in place are generally void or voidable: that is, any action the creditor takes in violation of the stay has no legal effect.

http://www.moranlaw.net/stay.htm

EDIT: Go to that law link and copy the FEDERAL LAW and give it to her HR person who needs to be "right sized" as that person should know this. 'Hub

[AngelinaCatHub]

we filed chapter 7 on the 30th of April. after my wife spoke with her payroll dept they sated that they need a release from the creditor who is garnishing our wages. is this correct? shouldnt the Notice of filling stop all collection activities?

I faxed a copy of the notice to the CA that is garnishing us as well. what else do i need to do?

Read the violation of automatic stay and also denote that to dumb HR person.

[AngelinaCatHub]

Violations of the stay

Anyone who willfully violates the stay in the case of an individual is liable for actual damages caused by the violation and sometimes for punitive damages. Some courts confine the right to damages to individual debtors and deny damages for stay violations as to corporate debtors.

Since the court usually takes several days to several weeks to mail creditors notice of the bankruptcy, it is incumbent on the debtor or debtor's counsel to give actual notice to creditors who might take action without knowledge of the stay.

Creditor actions taken after the stay is in place are generally void or voidable: that is, any action the creditor takes in violation of the stay has no legal effect.

http://www.moranlaw.net/stay.htm

[tigergem]

[GettingGoing]

We ran into this problem with my wifes wages a few weeks ago. Her check was garnished the same day we filed ch7. She called payroll and informed them of the filing as well as faxed the paperwork to them and they said that until the creditor told them to stop the garnishment that they would continue to take the money. Luckily the creditor stopped the garnishment before any more money was taken.

[blum1176]

so my wifes wages were garnished. 7 days after filing. how long does the CA have to refund my money. they are local, can i go to their office and demand a check? or do they have an allotted timeline to give us our money back? we are in dire need of these funds and im just wondering how long i can expect it to take. also in the law regarding violation of the stay, who would be liable, my wifes company's/payroll, or the CA. what recourse do i have tto collect damages(late charges, over drafts etc)

[GettingGoing]

so my wifes wages were garnished. 7 days after filing. how long does the CA have to refund my money. they are local, can i go to their office and demand a check? or do they have an allotted timeline to give us our money back? we are in dire need of these funds and im just wondering how long i can expect it to take. also in the law regarding violation of the stay, who would be liable, my wifes company's/payroll, or the CA. what recourse do i have tto collect damages(late charges, over drafts etc)

I would take a copy of your filing to their office and see what they say. You may try to call your wifes payroll department as they probably still have the money and may be able to get it back to your wife.

[blum1176]

payroll dept doesnt have it, the funds were already xfered.

[tigergem]

There are two types of proceedings that can be brought: a “motion for order to show cause” which requests the Court to issue an order requiring the offending creditor to appear before the Court and explain its conduct (reminiscent of Ricky Ricardo telling Lucy that she “has some esplainin’ to do”); or a formal adversary proceeding (summons and complaint). Either mechanism for bringing the matter to the Court’s attention appears to be equally effective.