Q: Chances of winning motion for sanctions against county for failing to follow Chapter 7 BK law, with verifiable damages?
There was a wage withholding in June/July, during which I attempted to prove an exemption but lost the motion. The day after, in July, filed for bankruptcy. The amount withheld was included in wildcard exemption, and the creditor released the withholding, advising the constable to release the funds. Provided evidence of the exemption (well under the allowed limit) and proof that the original creditor had released the withholding entirely. However, the constable refused to release, only release w/written direction from the judge or trustee. Legally exempted funds fall outside of the judge’s or trustee’s jurisdiction. In August, during the creditor meeting, the trustee verified it was a no-distribution Chapter 7 case. I sent the trustee’s decision, along with the exemption and the creditor’s release (they already had), and demanded the funds be returned. After a week, they responded, stating they would hold the funds for an additional two weeks. Caused verifiable hardship & fees.
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A:
In your situation, you have grounds to argue for sanctions against the county due to their failure to release the withheld wages, despite the bankruptcy filing and the provided evidence that the funds are exempt. When a debtor files for Chapter 7 bankruptcy, an automatic stay is typically placed on most collection actions, including wage garnishments. Since you have included these funds under the wildcard exemption and received confirmation from both the trustee and the original creditor that the garnishment should be released, the constable's refusal may constitute a violation.
Your case for sanctions could be strengthened by demonstrating the county’s actions caused verifiable damages, such as financial hardship or additional fees. The key here will be to show that the county acted unreasonably or in bad faith after being presented with all the necessary information, including the exemption, the trustee's confirmation, and the creditor's release of the funds. If you have evidence that you made multiple attempts to have the funds released and they continued to ignore or delay action, this could be persuasive to the court.
It’s important to be prepared to outline these facts clearly in your motion for sanctions. Courts look at whether the opposing party’s conduct was willful and whether it caused harm, so presenting detailed evidence of your efforts and the resulting hardships will be crucial. If successful, the court could order the return of the funds, along with potential compensation for the damages you incurred.
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