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Bankruptcy Stops Michigan Garnishments

When you file for Chapter 7 or Chapter 13 bankruptcy in Michigan, the “automatic stay” stops all creditor collections. Creditors must stop all phone calls, letters, collections, harassment, lawsuits, garnishments, repossessions, and foreclosures. Sometimes a client gets a garnishment notice and is surprised because they didn’t even know they had been sued.

Michigan Garnishment Law

If living on a budget wasn’t tough enough, a garnishment makes it impossible. In Michigan, a creditor may garnish up to 25% of your tax home pay. But this is the most that can be taken from your paycheck. If you have three creditors garnishing at the same time, they cannot take 75%. They will have to share the 25% from your pay. Creditor can also garnish bank accounts on which your name appears and also your State tax refund.

Getting Your Garnishment Back

Once you file for bankruptcy, any garnishments taken in the prior 90 days can be recovered from a creditor if the total amount take is more than $600.00. For example, you have a weekly net pay of $400. A creditor garnishes your wages and can take $100 from each check. If you are garnished for four months, you will only be able to get back $1,200 (3 months x 4 weeks x $100.00) and not the whole $1,600.

These pre-petition garnishments is recoverable. Last year, we recovered over $20,000 in garnished funds and put it back in the pockets of our clients. If the process is done properly, the creditor usually complies without argument. Sometimes they don’t. When they don’t give it back we always take them to court. We just don’t back down on this. The creditor probably thinks it isn’t enough money for us to put the work in to get it back. They are wrong. Without exception we pursue the recovery of recoverable garnishments.

Chris McAvoy is a Michigan attorney who helps people with bankruptcy, divorce, and estate planning. To find out more or set up an appointment, click here for contact info. Our attorneys help people in Taylor, Allen Park, Southgate, Lincoln Park, Riverview, Taylor,  Trenton, Flat Rock, Wyandotte, Brownstown, Belleville, Dearborn, Dearborn Heights, Westland, Garden City, Canton and the Downriver, Michigan area

 

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  1. Walt gibson

    Words can’t describe How much I appreciate the MCAVOY Law firm. From Chris, Ted. To the two beautiful,friendly ladies on the staff. I was in a bad situation that other firms didn’t even wanna deal with. From the moment I walked in the office to the last time I talked to Ted I felt like I was their most important client. They are professional, prepared and informative. Do not hesitate to call Chris MCAVOY Law firm. To Ted, I can’t Thank you you enough,you are the Best!!