If we go through a foreclosure, does an employer have the right to garnish my wages? 13 Answers as of July 30, 2011

It looks like my wife and I may need to go into foreclosure. My income is from disability and my wife works for the national bank that picked up Countrywide's mortgages. After 21 years at the same location she is now the manager of her branch, which started out as a different bank. If we get foreclosed, can her employer garnish her wages? Can they jeopardize her job? Our house is in a small historic town that really got hit hard by the value downturn. We now owe probably 1/2 of the last appraisal. We have lived here 16 years and did a lot of improvements over the years. And we also got a Title 1 loan 2 1/2 years ago for the full amount of 25k.Need any good advice or comment's that we can get.

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Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
If the property is owner occupied and they foreclose using non-judicial foreclosure, then they cannot pursue a deficiency judgment against you. This is also the same case if the mortgage was "purchase money" in which it was used to acquire the property. They cannot come after you and garnish wages in such cases. The bankruptcy code states that you cannot be terminated simply for filing for bankruptcy. However, I am not aware of a similar rule for foreclosures, and of course, if a position requires certain type of clearance, that me be impacted by these actions.
Answer Applies to: California
Replied: 7/25/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
It depends upon whether the mortgage company confirms the foreclosure sale and pursues an unsecured deficiency claim. They may or may not.
Answer Applies to: Georgia
Replied: 7/25/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The bank can not garnish her wages without a judgment which they will not get in a non-judicial foreclosure. If they bother her at her job you will have a hard time proving it was because of the foreclosure. A national bank is not likely to even know she is an employee.
Answer Applies to: California
Replied: 7/22/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
The most serious issue is your wife's job. She should discuss with her boss what effect the foreclosure would have on her job before it happens. The next thing is that it is not clear to me whether you meant that the house is worth twice the financing (you have equity) or the house is worth 1/2 the financing (under water). You speak of the area you live being hard hit, but if you have equity then you probably want to sell the house yourselves instead of allowing it to be foreclosed. Garnishment is an enforcement procedure that only happens after a court judgment is entered. If the financing which is being enforced by foreclosure is on your home, and the financing was the purchase money mortgage, then California's antideficiency law protects you from assertion by the lender of any deficiency. If you refinanced the property after purchase, then this is not true. The next issue is what to do if there is a deficiency that the lender can assert and what to do about what I presume is a second (the Title 1). There is the potential of you filing bankruptcy alone, even though you are married, and in California such a filing would discharge all community property debt, even though your wife did not file. As you can see, your situation is quite complex, and you really should discuss it in detail with an experienced bankruptcy attorney.
Answer Applies to: California
Replied: 7/22/2011
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
You need to see a bankruptcy lawyer that can save your house in a Chapter 13 plan. It is not your employer that garnish your wages it is the Creditor.
Answer Applies to: New York
Replied: 7/22/2011
    The Law Offices of Mark Wm. Hofgard, Esq.
    The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
    The foreclosure, standing alone, does not provide for garnishment. Foreclosure is an action in rem , meaning that it is an action against the property and not against you personally. However, if the creditor bids in less than the full amount due and the creditor's bid is the highest at the foreclosure sale (including costs and attorneys fees), the creditor may take a deficiency. The deficiency may be pursued against the debtors (whoever signed the promissory note) as a personal action, and garnishment is possible from the deficiency action. Also check the employer/bank's employee manual, and the employment contract, if any. There may be some terms of employment or policies that address transactions with the employer. Whether the employer may lawfully terminate employment requires more information.
    Answer Applies to: Colorado
    Replied: 7/22/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    You can be sued for the deficiency owed after the foreclosure. Or they can send you an IRS Form 1099, meaning the deficiency is taxable. History with a creditor means nothing. Or you could file bankruptcy and have none of these financial consequences.
    Answer Applies to: Virginia
    Replied: 7/22/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    After foreclosure of your residence nothing is owed so there couldn't be a wage garnishment. If you file bankruptcy you are protected from employment discrimination, public or private, under section 525 of the bankruptcy code. In other words your work is not affected on account of bankruptcy.
    Answer Applies to: California
    Replied: 7/22/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Duty post judgement..not choicr
    Answer Applies to: Maryland
    Replied: 7/22/2011
    Rosenberg & Press, LLC
    Rosenberg & Press, LLC | Christopher D. Hite
    Foreclosure will likely result in loss of house, but not a money judgment that would lead to garnish. Investigate your options with an attorney as soon as possible.
    Answer Applies to: Connecticut
    Replied: 7/22/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    If there is a deficiency, the lender can sue after foreclosure and then do a garnishment of wages and bank accounts. If you are facing foreclosure see a lawyer to determine if filing a bankruptcy is possible as that would prevent this outcome.
    Answer Applies to: Georgia
    Replied: 7/22/2011
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