21
Feb
2022
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 Monday, February 21st, 2022 at 9:06 am and is filed under Bankruptcy, Employees.
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