As your Maryland bankruptcy attorney I help clients eliminate debt and get a fresh start through the bankruptcy process.
Often times, our clients come to us after a garnishment notice is sent to their employer or their bank accounts are levied by a creditor. As a Baltimore bankruptcy attorney my advice would be that you take action well before the garnishment or bank levy. The good news is that we can help you get back funds that have recently been garnished or levied from your bank account.
A wage garnishment occurs after a creditor has obtained a judgment against you and then issues a writ or an order to collect to your employer. In Maryland an employer can withhold up to 25% of your wages and send the money to your creditor.
A bank levy occurs when a writ of garnishment is served on your banking institution causing it to freeze the assets in the account and sets the funds aside. If you file your bankruptcy case before the funds are turned over to the creditor then the creditor cannot reach the funds due to the automatic stay.
Garnishments and bank levies are subject to the preferential transfers provision of the bankruptcy code. Preferential transfers refer to an instance where the debts of any one unsecured creditor such as a credit card are paid over another similarly situated creditor. This means that payments to an unsecured creditor made within the look-back period can be clawed back and placed within the bankruptcy estate. The bankruptcy estate generally refers to the assets and liabilities of the debtor at the time of filing.
Garnishments and bank levies within 90 days of the bankruptcy filing may be recovered and placed back in the bankruptcy estate. If this happens then you have the ability to use your exemptions to protect the money recouped from a creditor. For example, a garnishment of $800.00 within 90 days can be recouped and exempted by a debtor with at least that much in exemptions.
One big exception for recouping wage garnishments relates to obligations that cannot be discharged in bankruptcy such as child support or spousal support.
In conclusion, wage garnishments and bank levies occurring within 90 days of the filing of your case may be undone to your benefit resulting in the return on much needed funds to you. If you have a judgment or a notice of a writ of garnishment run to a knowledgeable bankruptcy lawyer to review your options.
Get your fresh start today. Debt does not have to rule your life. We can show you how to get a fresh . For flexible schedules and payment plans call 443-982-0475 or contact us online to schedule your free initial consultation.
This is a general overview and is not meant as a comprehensive discussion. For this reason and others, it is always a good idea to speak with a knowledgeable Maryland bankruptcy lawyer to get answers specific to your situation.
Joseph K. Githuku
Maryland Bankruptcy Lawyer
Baltimore Bankruptcy Lawyer
Bankruptcy lawyer in Baltimore
Bankruptcy lawyer in Maryland
Disclaimer: This article is provided for informational purposes only and should not be construed in any way as legal advice. This article does not create an attorney-client relationship.