Legal Question in Bankruptcy in California

holding garnished money

We have recently filed for chapt 7 and had a previous garnishment. The sheriff has sent us a letter saying they are holding a certain amount of money. Most of the creditors we have talked to have closed our accts that we owed money including the garnished one. Where does that money that is outstanding go too and can we reclaim that money if no creditors ask for it?


Asked on 1/02/09, 2:05 am

1 Answer from Attorneys
Robert Mccoy Law Office Of Robert McCoy

Re: holding garnished money

All money not claimed as exempt is considered property of the estate. All non-exempt property of the estate belongs to the trustee to distribute to your creditors.

So, if you claimed the money seized as exempt, then you need to hire an attorney to file a motion to avoid a lien that impairs an exemption. If you did not claim the money as exempt, but want to, you will have to file a motion to amend your petition. It could cost you up to $1500 to hire an attorney to file these motions.

If you claimed the money as exempt but do not file a motion, then the creditor will probably get the money after your bankruptcy is discharged.

If you did not claim the money as exempt, I have seen one of two things happen. Sometimes the Sheriff will give the money to the trustee and he will distribute it to your creditors, and other times I have seen the Sheriff hold onto the money until discharge and then give the money to the creditor who filed the attachmnent.

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Answered on 1/02/09, 3:59 pm


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