Legal News for Credit Union Managers Since 1990
« Preferential Transfers & Garnishment
Credit Union’s Failure to Payoff Existing Mortgage »
08
Aug
2023

Garnishee Defendant Judgment: No Violation of Automatic Bankruptcy Stay

In this case, a creditor proceeded to collect on judgment against garnishee defendant even though principal defendant filed Chapter 7 bankruptcy. The Court found no violation of automatic stay. Judgment against garnishee defendant was on debtor’s wages.
 
Here, the creditor held a judgment against debtor and sought to collect the judgment with a garnishment on debtor’s wages. Debtor’s employer was required to disclose wage information about the debtor, however, the employer failed to do so. Consequently, creditor sought and obtained a judgment against the employer for failure to honor the garnishment.
 
Thereafter, debtor filed a Chapter 7 bankruptcy. Due to the debtor’s filing for bankruptcy, creditor discontinued collection activity against debtor and proceeded to collect from the employer on the judgment entered directly against that employer.
 
Employer alleged that the bankruptcy stay prohibited this creditor from taking any further actions to collect the money originally owed by its employee.

The court held in favor of the creditor and found that collection from the employer on the judgment entered for failure to honor a garnishment did not violate the automatic stay even though the debtor’s obligation was stayed and would be, presumably, discharged. Bour v. Johnson (WL 19933502661).

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Tuesday, August 8th, 2023 at 9:05 am and is filed under Bankruptcy, Employees. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Your comment

Powered by WP Hashcash

  • Recently Posted Articles written by: Charels R. Harroun, Attorney at Law

    • $100,000.00 Award to Employee
    • Michigan Supreme Court: Secured Loan Loss Payable Clause
    • Fraudulent Mortgage Application
    • Employee Discrimination: Failure to Promote
    • Waiver of Right to Rescind Reaffirmation Agreement Unenforceable
    • Worthless (NSF) Checks Constitute Fraud
    • Discharge Denied: Joint Ownership of Assets
    • Constructive Discharge: Credit Union Violates Employee’s Rights
    • Credit Union Assessed Punitive Damages
    • Defective Notice to Sell Collateral Defeats Collection of Deficiency
    • Nondischargeable Debt: Disassembled Collateral

  • Website Builder

2009-2020 Copyright Harroun, P.C. | Credit Union Legal Newsletter powered by WordPress and Uchilla
Subscribe: Entries (RSS) and Comments (RSS)