Wage Garnishments & Bank Account Restraints
After a creditor successfully sues a debtor and obtains a judgment, the judgment creditor has several options to collect on the judgment. Two of the most commonly employed methods are Wage Garnishments and Bank Account Restraints.
Middletown NY Bankruptcy Attorney Stopping Wage Garnishments
In a Wage Garnishment the collecting Sheriff or Marshal will serve you with a document called an Income Execution. After such service the debtor has twenty days to commence voluntary payments to the Sheriff or Marshall of 10% of his gross salary. As you can probably imagine, debtors rarely make such voluntary payments. If no voluntary payments are made, the collecting Sheriff or Marshal will then serve the Income Execution on your employer who will then commence withholding 10% of your gross salary.
Middletown NY Bankruptcy Attorney Stopping Bank Account Restraints
Although judgment creditors frequently have no idea where you do your banking, they do know which county you live in and will frequently serve an Information Subpoena and Restraining Notice on all of the banks in your area, hoping to find an account that has your name on it. If they do the account is immediately restrained ( or "frozen" ), which deprives you of access to the funds in said account. This can cause all kinds of problems, because any checks issued ( but not cashed ) prior to the Restraint will bounce. If one of these checks is to your landlord, you have a problem. The judgment creditor then has the collecting Sheriff or Marshal serve a Property Execution on the bank, at which time the funds ( up to the judgment amount plus interest ) are removed from the account. However, due to a 2009 statutory amendment, banks in New York State are no longer allowed to restrain a bank account containing less than $1,740.00, or $2,500.00 if there are exempt funds (ie., Social Security, pension, etc.) directly deposited therein. This has resulted in far fewer bank accounts being restrained in this State.
The above two scenarios are dealt with on a regular basis by this law firm. An Automatic Stay is created when a bankruptcy petition is filed, and it is the Automatic Stay that immediately brings an end to any Wage Garnishment or Bank Account Restraint. However, because it usually takes the Court several days to mail out the Notice of Commencement of Case to the necessary parties, Bankruptcy Attorney Michael O'Leary takes certain extra steps to make certain that the necessary parties ( ie., judgment creditor's attorney, debtor's employer and/or bank, the collecting Sheriff or Marshal ) are aware of the bankruptcy filing in "real time"-- usually within an hour of the filing. This extra effort allows a debtor to regain control of his paycheck and/or bank account as soon as possible, which can be the
first step down the long road to financial recovery
Middletown, New York 10940 
