How do I stop my wage from being garnished when filing for bankruptcy? 15 Answers as of December 01, 2014

I want to file for bankruptcy but I need my refund to buy a car because someone stole my car. When is the best time to file for bankruptcy so the court trustee won't take my refund? If I file after I receive my refund will I have to give my refund the following year next year?

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Idaho Bankruptcy Law | Paul Ross
Typically I prefer to file bankruptcy after the refund has been received and appropriately spent. But circumstances do not always allow for those circumstances. Depending on the size of your normal tax refunds, but usually the Trustee will not wait for the following year's refund.
Answer Applies to: Idaho
Replied: 12/1/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Are you taking abut the tax refund? You need to speak to local counsel. The answer to this question varies from place to place. Your refund might also be "exempt" meaning the trustee can not have it.
Answer Applies to: California
Replied: 12/1/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
It is best to receive your refund and spend it before you file your BK. The Trustee will only look at your tax return for 2014.
Answer Applies to: Colorado
Replied: 12/1/2014
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
The bankruptcy should stop the wage garnishment. The way it works is that after the bankruptcy case is filed, notice goes out to the creditors that you list in the petition. The attorney for the creditor after receiving the bankruptcy notice will send request to the sheriff to stop the garnishment. Then the sheriff processes the requests by notifying the employer. If when this happens there is money held by the sheriff they typically issue a check to the employer and the employer will either give you the sum in a separate check or include it in the next payroll check. If there is money held at the creditor's they will typically send the check directly to you or to your attorney. Typically this takes about a week or two, you can expedite by faxing the bankruptcy notice to the attorney for the creditor rather than waiting for snail mail notice to reach them. As far as refund, I assume you are talking about a tax refund. Whether you get to keep it all or some, will depend on if the amount of refund can fit inside an exemption and be exempted from the creditors reach. To know this I would need to understand the amount of the refund and also the types and values of your other assets. Assets is basically anything of value, including potential lawsuits/claims against another (for example: personal injury, workmen's comp) and debt owed to you as well as other things like cars, boats, household goods, timeshares, etc. Hopefully the refund would fit under the California wildcard exemption, assuming you are entitled to use California exemptions and the specific type known as the 703s. In California we have two sets of exemptions. If the tax refund fits into an exemption, you list it on your schedule B as an asset and then exempt it on Schedule C. If you hire an attorney to handle your case you will want to disclose to them your assets, including the tax refund amount. They will do the exemption analysis and let you know if filing right now makes sense or if it's better to wait.
Answer Applies to: California
Replied: 12/1/2014
When you file bankruptcy there is an automatic stop preventing creditors from any collection action including garnishments. Anything taken within 90 days of filing must be given back. You should be able to exempt thus keep any tax refunds.
Answer Applies to: Minnesota
Replied: 12/1/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Upon filing bankruptcy your garnishments cease. A tax refund is not exempt in Nevada but you do have a $1,000 wild card exemption you can apply toward it. Otherwise, you'll have to wait to file bk until after you have collected your refund and purchased a car. The vehicle exemption in Nevada is $15,000. Trustee's will take a refund for those months prior to the bk filing, so if you file next May 2015 the trustee could in theory hold your case open to collect 1/3 of your 2015 refund, but it depends on the anticipated amount. It may not be worth it for the trustee to do so.
    Answer Applies to: Nevada
    Replied: 12/1/2014
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    It does not matter when you file. You will be able to protect some if not all of it. You should consult with an attorney to discuss your options and what will be protected.
    Answer Applies to: Florida
    Replied: 12/1/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    To stop a garnishment, your attorney will need to advise the creditor and your employer of the bankruptcy filing and provide them with proof. Doing that will be at odds with your desire to protect your tax refund for next year. You will need to decide which way will cost you the least and act accordingly.
    Answer Applies to: Nevada
    Replied: 12/1/2014
    Ronald K. Nims LLC | Ronald K. Nims
    The first issue is whether you're refund might be exempt. All states have at least a small wildcard exemption which may be used for any asset - including a tax refund. Some states have a significant exemption, states that use the Federal exemption - have a wildcard exemption (for debtors who do not own their own home) of $8,300. There are other exemptions that might apply, in Ohio portions of the child care credit and the earned income credit are exempt. So if your refund is largely or totally the result of these credits, it's exempt. If your refund is exempt, the trustee can't take it. And you can file without worrying about losing your tax exemption. If your refund isn't exempt, then you should file after you have received your refund and used it as the down payment on your new car. Because if the refund is sitting in your bank account, the trustee can take it.
    Answer Applies to: Ohio
    Replied: 12/1/2014
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    You are talking about exemptions and there is no way to answer your question without knowing a lot more information. If you file a Chapter 7 case, most likely you would not need to turn over your refund, but it depends on the amount of the refund(s), the value of your other assets that need to be protected, and what exemptions you have available under applicable law. You need to have a consultation with a bankruptcy attorney to go over all the relevant information. Your question cannot be answered in a forum like this.
    Answer Applies to: California
    Replied: 12/1/2014
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    First, depending upon the size of your other assets, and the amount of the refund, you may be able to exempt the total refund. Any bankruptcy you file between now and when you receive the refund will have to list the claim for refund on Schedule B, and any possible exemptions on Schedule C. As you know, filing a bankruptcy creates an 'Automatic Stay' of virtually all collection efforts. So in theory as soon as your creditor gets notice of the BR filing, it should stop the garnishment. But in practice, they sometimes neglect to do it. Which is why you should see to it that the Clerk of the Court in which the garnishment is being done is informed of the filing. Letting your payroll office know is also a good idea. It's best in these matters to retain a lawyer experienced in Bankruptcy. If you do, be sure to tell him or her all these facts and concerns. It's not hard to make this all work. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 12/1/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    Unless you are expecting a refund upwards of $10,000, the federal exemptions should be sufficient to cover any tax refunds you might be expecting, and the trustee would not be able to claim them. S/he might still ask for a copy of your tax returns when you prepare them, just to verify the amount of refund you get. If you do not qualify for the federal exemptions, then it may be better to wait until you have received your refund and purchased another car, so that you can claim the vehicle exemption. You should get a free consultation from an attorney to advise you on the best exemption strategy. You also have to consider how much you would be garnished if you wait for 2 or 3 months to receive and spend your refund.
    Answer Applies to: Oregon
    Replied: 12/1/2014
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    If you file bankruptcy now the trustee will take your 2014 tax refund if your exemption is not enough to cover the amount refunded. You can avoid this by filing taxes first, receiving the refund, and spending the refund on daily necessities, as longs you keep your spending well documented. If you buy a car with the refund, your car will become equity (unless you're taking out a loan and only use the refund as down payment), and you may have to give up the car.
    Answer Applies to: Florida
    Replied: 12/1/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you have enough exemptions then they can not take your refund anyway.
    Answer Applies to: New York
    Replied: 12/1/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Your information is garbled. If you are speaking of income tax refunds, they are prolly of the bankrupt estate. Whether or not they accrue is up to you and therefore none should exist next year.
    Answer Applies to: Michigan
    Replied: 12/1/2014
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