Asked in Banking and Bankruptcy for California

Q: Objectively, can creditors in Chapter 7 garnish checking account money from State and Government benefits?

Benefits including Social Security, stimulus check and Unemployment Insurance due to Covid-19 in California.

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4 Lawyer Answers
Harlene Miller
Harlene Miller
Answered
  • Bankruptcy Lawyer
  • Irvine, CA
  • Licensed in California

A: Question not specific. Are you currently in a chapter 7 bankruptcy case? If so, creditors are stayed from collecting from you - no matter what the source of the funds. Upon filing a bankruptcy, any garnishment in place is stopped. Talk with your bankruptcy attorney - hopefully you have one advising you. If a garnishment was in place when the case was filed, the attorney should have immediately sent a separate notification to the creditor's attorney regarding the bankruptcy and confirmed with bank also. If you don't have an attorney, I suggest you seek legal advice from an experienced bankruptcy attorney to assist you.

Theodore Allan Greene agrees with this answer

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: No. The automatic stay prohibits them.

Aaron Michael Lloyd
Aaron Michael Lloyd
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Redlands, CA

A: Are you currently in a bankruptcy case? Outside of bankruptcy, a creditor can levy a bank account. Once levied upon it is up to the judgment debtor to object and file the necessary paperwork to protect any kind of social security or retirement benefits. The court does not know what funds have been levied upon until the person files papers stating what those funds are. It is best to hire a lawyer familiar with this process to prevent any funds being lost from a levied account that could have been saved.

David Luther Woodward
David Luther Woodward
Answered
  • Bankruptcy Lawyer
  • Pensacola, FL

A: Not legally.

Section 362 of the Act enjoins all creditors from self-help or litigation in the attempt to collect, and they must go to the court where the bankruptcy is filed.

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