Adversary Case(s)

[Anonymous]

So, I find myself in a bit of a situation. I filed BK13 on 6/5/17. There was an automatic stay put in place the day I filed. Well, fast forward a week later. One of my creditors sent a payment through my account (they had access to my checking account and routing numbers, it was not an ACH). Then, two weeks later, two more creditors (same style of transaction) sent payments through my account. Fast foward a month later (July 2017), one of the creditors collected another payment. In total, they have gotten about $900.00 from my account (post my filing date). I don't think I need to explain how this has put me in another financial situation, now that my paycheck is being garnished for the BK13, and it takes a pretty significant chunk out of my pay.  Questions to you all: 1) Have you ever dealt with this before?  If so, what was the outcome (i.e.you got your money back)?  My attorney has advised me that we will now have to do an adversary case to try and collect my money back.

Thanks.

[Anonymous]

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@Anonymous wrote:

So, I find myself in a bit of a situation. I filed BK13 on 6/5/17. There was an automatic stay put in place the day I filed. Well, fast forward a week later. One of my creditors sent a payment through my account (they had access to my checking account and routing numbers, it was not an ACH). Then, two weeks later, two more creditors (same style of transaction) sent payments through my account. Fast foward a month later (July 2017), one of the creditors collected another payment. In total, they have gotten about $900.00 from my account (post my filing date). I don't think I need to explain how this has put me in another financial situation, now that my paycheck is being garnished for the BK13, and it takes a pretty significant chunk out of my pay.  Questions to you all: 1) Have you ever dealt with this before?  If so, what was the outcome (i.e.you got your money back)?  My attorney has advised me that we will now have to do an adversary case to try and collect my money back.

Thanks.

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Sometimes it takes time for the creditors to notice the BK (I'm thinking they do it on purpose, but that's just me lol)

I think your lawyer is right you will have to let them know that they shouldn't have taken that money and that they need to return it.

[Anonymous]

So for those who haven't filed yet, this is a great example of why it's important to discontinue any types of automatic payments prior to filing (and perhaps as a general rule of life). 

While you could start an adversary proceeding agaist the creditors, it would seem to me that this is a violation of the automatic stay, which should entitle you to compensation. Has your attorney offered to assist with this? Often if you are entitled to compensation your attorney makes money too. If she/he isn't suggesting you move forward, I would ask why not. Regardless, the first step, I think, is for someone to simply write a letter advising of this and demanding the payment back. 

On another note, you mentioned your wages are being garnished because of the Chapter 13 bankruptcy. Is this due to your plan being confirmed and payments starting? If not, I'm a bit confused.

[DaveInAZ]

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@Anonymous wrote:

So for those who haven't filed yet, this is a great example of why it's important to discontinue any types of automatic payments prior to filing (and perhaps as a general rule of life). 

While you could start an adversary proceeding agaist the creditors, it would seem to me that this is a violation of the automatic stay, which should entitle you to compensation. Has your attorney offered to assist with this? Often if you are entitled to compensation your attorney makes money too. If she/he isn't suggesting you move forward, I would ask why not. Regardless, the first step, I think, is for someone to simply write a letter advising of this and demanding the payment back. 

On another note, you mentioned your wages are being garnished because of the Chapter 13 bankruptcy. Is this due to your plan being confirmed and payments starting? If not, I'm a bit confused.

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While yes, it is a good idea to discontinue all automatic payments prior to filing, it's not clear from the OP they were automatic payments, they just said the creditor had access to the bank account routing & number, like any bank account you have used to make payments.

A better idea is what my attorney advised me prior to filing: Close all bank accounts your creditors have on file and open a new account at a different bank/credit union. In my 2010 BK7 1 creditor - Chase - tried several times to charge my bank account they had on file, if I hadn't closed the account I would have lost money or had overdraft fees.

[Anonymous]

Voltaic - LOL. I agree - they do it on purpose.

[Anonymous]

I agree with you on discontinuing the automatic payments. I thought the stay would have stopped them. I learned it didn't. You live and learn. Yes, my attorney is working with me on getting compensated for this. There have been letters sent (by my attorney's office) to these creditors as well. One of them actually sent a credit through my account yesterday. So, about my wages being garnished already, even though my confirmation hearing isn't until the 22nd of this month. The order was put into place, by the judge, three days after I filed (6/8/17). The employer acknowledged the order on July 1; however, the way that exceptions are processed at my job (about a two week lag time), the garnishment didn't start with my 1st check (the 5th), it started with my 20th check. By bankruptcy law, you have to make your first full payment 30 days after your filing date, whether you've had your 341 or your confirmation hearing. So, I made my first payment on 7/5.

[Anonymous]

The reason I didn't close the checking account is because my paycheck is direct deposit to the account. I hate having to change direct deposit, getting a paper check while they put the new direct deposit in place, etc., and the hassle of remembering to call the other companies for your household expenses to let them know of this change. I know, closing them would have stopped all this, though. And, yes, my attorney did advise me of what might possibly happen if the account was not closed. He said that, for the most part, creditors adhere to the automatic stay; however, sometimes, there are those that don't.

[pizza1]

Im not that clear on the BK13's, but I am on the 7's, and this definitely wouldnt have flown in that situation. The trustee would have demanded all the money back that your creditor took from your checking acts, and dispersed it evenly to ALL your creditors.

Its possible in your case, that could still happen. When you file a BK, there is no preferential treatment to anyone, and the trustee decides who gets $$$, not any certain creditor.