Can my Garnished Funds be Recovered After Filing a Bankruptcy?

The short answer is yes. The long answer is yes, but it depends on the situation. If a creditor has garnished a debtor’s funds there are ways for the debtor to recover some of the money after filing bankruptcy.

Any funds taken by garnishment or levy within the 90-days prior to the bankruptcy filing can potentially be recovered. If the total amount is $600 or more a debtor can make a claim for the return of the funds. However, in a bankruptcy a debtor can only protect a certain dollar amount of their assets. If the debtor has already exceeded the amount which could be protected the garnished funds cannot be recovered. In that situation the bankruptcy court may attempt to recover the funds and then distribute them evenly to all the debtor’s creditors.

If the creditor refuses to return the garnished funds a debtor does have the option of filing a claim with the bankruptcy court. The court may compel the creditor to return the funds. However, it does cost money to file the claim so a debtor will need to weigh the cost of the claim against the amount that could potentially be recovered.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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