Am I eligible for a refund on garnished wages if I file for bankruptcy? 20 Answers as of August 11, 2011

I have received a Default Judgment against me for unpaid credit card debt in amount of $16K and my wages are now being garnished 25% every pay-period (twice monthly) effective July 2011. QUESTION: If I file Chapter 7 BK in August 2011, will I be able or entitled to receive a refund for the "already garnished portion amount" deducted from my paycheck since the garnishment is active and in effect 90 days "prior to" my Chapter 7 BK Filing in August 2011? Or does this 90-Day Rule regarding "refunds on garnished amounts" only apply to residents of some states?

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
your attorney can probably get that back for you if it's over $600
Answer Applies to: Washington
Replied: 8/11/2011
Heupel Law
Heupel Law | Kevin Heupel
There would be a refund of the garnishment if you filed Chapter 7 within 90 days of the garnishment start date, but the funds would go to the trustee who is appointed by the bankruptcy court. The trustee will collect the funds from the creditor who garnished you, and then redistribute the funds to all of your creditors. However, if you owe taxes or child support, the funds would go to them as priority debt so sometimes it is good to file soon even though you will not get the money.
Answer Applies to: Colorado
Replied: 8/9/2011
Eric J. Benzer, Attorney at Law
Eric J. Benzer, Attorney at Law | Eric Benzer
No
Answer Applies to: Maryland
Replied: 8/6/2011
Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
As long as it exceeds $600 and you list it on schedule B and exempt it on schedule C.
Answer Applies to: Michigan
Replied: 8/2/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
When wages are being garnished prior to bankruptcy, filing will automatically stop it. It is a voidable preference for the 90 days prior to filing and it is the trustee who is entitled to recover the payments. The trustee might help you recover this if you claim an exemption for the amount garnished.
Answer Applies to: California
Replied: 8/2/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You will get back whatever the Sheriff still has in his/her possession when you file the bankruptcy case assuming you can exempt the amount garnished in your bankruptcy petition. The amount transferred to the creditor by the Sheriff before the bankruptcy filing date can be obtained if the Trustee does not claim it. If not given back voluntarily by the creditor then you have to file an adversary proceeding (a bankruptcy lawsuit) to get the money transferred by garnishment to the creditor in the 90 days before filing the bankruptcy case.
    Answer Applies to: California
    Replied: 8/2/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The 90 days applies, but belongs to the bankruptcy trustee. Either the bankruptcy trustee will ask for it and get it, or if the trustee cannot obtain the money to pay creditors, it is not worth the trustee going after and not recovered. Filing will stop future withholding, so any more withholding is money down the drain to you.
    Answer Applies to: California
    Replied: 8/2/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First of all, get a lawyer. Not all garnisheed funds are recoverable. And even if they are, it sometimes may be your Trustee who recovers them and pays them to other creditors. The answer will depend on the amount garnisheed, what has happened since to those funds, what you can exempt (and a good attorney will know how to maximize exemptions), etc. Even a day or two may affect what you keep and get back as money still with your employer may be easier to recover. So see a lawyer not tomorrow but today.
    Answer Applies to: Georgia
    Replied: 8/2/2011
    Lewis Adams and Associates
    Lewis Adams and Associates | Lewis P. Adams
    Garnished wages are refunded only if taken after filing for bankruptcy. A Chapter 7 Trustee may be able to require turnover of funds garnished prior the petition date, but you personally would not receive a refund.
    Answer Applies to: Utah
    Replied: 8/1/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    You cannot get a refund on this. However, all future garnishments will stop. The 90 day rule is in place for the trustee to reclaim the funds and distribute them to the creditors, but not to give back to you.
    Answer Applies to: Oregon
    Replied: 8/1/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    You will not receive a refund of amounts garnished before the bankruptcy. What can happen is that the Trustee will go and have the amounts garnished turned over to him/her and then the money will be more evenly divided among creditors. This is called avoiding a preference. None of this money will come back to you, however.
    Answer Applies to: Colorado
    Replied: 8/1/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    You may be able to recover the funds garnished in the 90 days prior to filing as a preference but you would have to exempt those funds so that they don't go into the bankruptcy estate.
    Answer Applies to: Georgia
    Replied: 8/1/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Only the amount being still held by the Sheriff and with the Chapter 7 Trustee's approval and release and if you exempted them.
    Answer Applies to: California
    Replied: 8/1/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If you're in VA, you can get a refund of garnished wages as long as bankruptcy is filed before the Return Date noted on the Summons. It should be more than a day or two before, as well. A lawyer can get it done faster and with fewer headaches.
    Answer Applies to: Virginia
    Replied: 8/1/2011
    Ray Fisher Law Offices
    Ray Fisher Law Offices | Ray Fisher
    As a rule I think those payments would be a preference payment that the trustee would be entitled to get back. Clearly you are not in Texas since a creditor cannot garnish wages in Texas. You should talk to a bankruptcy lawyer in your state about this.
    Answer Applies to: Texas
    Replied: 8/1/2011
    Ryan Legal Services, Inc.
    Ryan Legal Services, Inc. | Kevin Ryan
    The bankruptcy Trustee assigned to your case may have a claim on those funds, depending on how much was garnished during the 90 days prior to filing, and depending on what exemptions are claimed and on which item(s) of personal property.
    Answer Applies to: Ohio
    Replied: 8/1/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You will only get back the amounts they take after you file for bankruptcy. To back the 90 days will cost a small fortune.
    Answer Applies to: California
    Replied: 8/1/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    The Sheriff is required to keep the funds for 21 days before they can hand it off to the creditor who has the lien. After that, whatever they have they will turn over. When you file, you can (assuming a couple other factors aren't a problem), get back whatever the Sheriff has in his or her possession at that time. Obviously, the sooner you file, the better.
    Answer Applies to: California
    Replied: 8/1/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Regardless of refund (and the answer is generally yes) you need to file to stop further damage.
    Answer Applies to: California
    Replied: 8/1/2011
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