If I filed Chapter 7 bankruptcy, don’t all garnishments cease?
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If I filed Chapter 7 bankruptcy, don’t all garnishments cease?
We filed chapter 7 bankruptcy 2 months ago on the 9th. Our state tax refund was being garnished. Received a letter from the our state’s treasury department on the 10th.It stated that they were holding our refund for 28 days after which it would be released to the named creditor. Called the treasury department and was told funds were sent to the creditor ane we would have to get the money back from the creditor. The creditor is not entitled to the refund because they got the funds after we filed, correct? We had meeting the of creditors on last month on the 14th; discharged last week. Need to know my rights because the creditor won’t respond to us.
Asked on October 20, 2011 under Bankruptcy Law, Michigan
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
There are a couple of different ways to deal with this. One is to simply write a letter to the creditor demanding return of the funds, and see what happens. The more legal approach is to file a Motion to Avoid the lien of the creditor pursuant to 11 USC 522(f) and then demand turnover of the funds. In order to do this, however, you would need to have listed the funds that were taken as an asset on your bankruptcy petition and then exempted it under applicable law.
Exemptions are "protections" for value you have in certain assets such that they are "exempt" from collections. Every state has different exemptions amounts available. Exemption laws are based on the state where you resided for the 2 years prior to filing your bankruptcy case or, if you lived in more than 1 state during that period, in the state where you resided for the greater part of the 180 days prior to that 2 year period.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
There are a couple of different ways to deal with this. One is to simply write a letter to the creditor demanding return of the funds, and see what happens. The more legal approach is to file a Motion to Avoid the lien of the creditor pursuant to 11 USC 522(f) and then demand turnover of the funds. In order to do this, however, you would need to have listed the funds that were taken as an asset on your bankruptcy petition and then exempted it under applicable law.
Exemptions are "protections" for value you have in certain assets such that they are "exempt" from collections. Every state has different exemptions amounts available. Exemption laws are based on the state where you resided for the 2 years prior to filing your bankruptcy case or, if you lived in more than 1 state during that period, in the state where you resided for the greater part of the 180 days prior to that 2 year period.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
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