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Submitted by DakotaLegal on
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Submitted by DakotaLegal on
The answer is yes, it can be done, but only “Maybe” can the money be kept completely out of the hands of garnishment over time. There are some risks involved, both to you and to your employer. There will also be a couple of interesting legal questions that might settle the matter: how does Indiana law define “salary” (is it property?) and is your type of job one that might normally involve receiving advances? Or is this more of a loan or advance to you? The point of these basic questions is to emphasize one general rule…a court will not usually act to protect any attempt to hide assets or income from a lawful order or statutory (under Indiana law) process.
The wildcard is the bankruptcy process itself. Let’s start with the general rules about garnishments in Indiana, then look at some affordable legal aid options, and end by a discussion about the effect of bankruptcy on other legal proceedings such as garnishment.
General Rules Of Garnishment
There are also types of garnishments that you need to especially wary of. A state garnishment for child support or to reimburse the state for costs of a child’s medical aid program raises special worries…in large part because the state has very little worry about extensive legal costs and may be able to perfect its garnishment almost immediately. The state also has more power to act quickly to declare a garnishment. This matter of “timing” is important to decide when the garnishment is valid or not… http://caselaw.findlaw .com/in-court-of-appeals/1171293.html.
If this is to be a garnishment order on real property (such as after a home foreclosure), then there are special rules protecting you from a premature garnishment order under Indian law: http://caselaw.findlaw.com/in-court-of-appeals/1309415.html. If you can, challenge the garnishment.
Try To Find Some Affordable Legal Advice
Don’t underestimate the power of self-help in this problem. You may have an advantage, by not having to justify some uncertainties such as what Indiana law says about salary, loans, and garnishment. On the other hand, a lawyer has important ethical considerations, and is very unlikely to want to help (even indirectly) in skirting the law of garnishments. To look into how to take legal matters into your own hands, consider these resources… http://www.in.gov/judiciary/selfservice/.
You can try Indiana legal aid, based on your income: http://www.indianalegalservices .org/. The Indiana bar association has some free assistance, too: http://www.inbar. org/ISBALinks/Committees/ProBono/tabid/149/Default.aspx. Some Indiana law schools also help the general public, such as the Mauer law school… http://www.law. indiana.edu/students/clinic/elmore.shtml.
The Role of Bankruptcy: The “90 Day” Rule
When you receive the garnishment and when you file for bankruptcy are going to be essential.
What you may have going for you is the power of a bankruptcy filing to stop all other state actions. From your question, it seems there is not yet a garnishment order. That helps. If you file for bankruptcy before any garnishment order is actually filed, this makes claims filed before the bankruptcy more likely to be paid (and by inference, a post-filing garnishment is weaker). Still, just because you file for bankruptcy does not mean all prior debts will be ignored…this is especially true of there’s an argument that any transfers were made in anticipation of hiding or sheltering money. You’ll be producing bank records, so if the “advance” you get form the employer is deposited into a bank account, or shows as regular income on wage statements you submit in your filing, then creditors will see it. Here’s a case describing this process, and where a garnishment was received 90 days before filing: http://caselaw.findlaw. com/us-7th-circuit/1118816.html.
But it’s a harder question in this case, since it’s not money that you gotten from selling something, but unearned money you have received. And as the case just mentioned emphasizes, federal law may decide about timing, but Indiana state law will settle whether the money you received “in advance” is personal property: “Under Indiana law a notice of garnishment not only prevents the debtor from withdrawing the funds in his bank account but also gives the judgment creditor who procured the notice a lien against the funds up to the amount of the judgment.”
The answer is yes, it can be done, but only “Maybe” can the money be kept completely out of the hands of garnishment over time. There are some risks involved, both to you and to your employer. There will also be a couple of interesting legal questions that might settle the matter: how does Indiana law define “salary” (is it property?) and is your type of job one that might normally involve receiving advances? Or is this more of a loan or advance to you? The point of these basic questions is to emphasize one general rule…a court will not usually act to protect any attempt to hide assets or income from a lawful order or statutory (under Indiana law) process.
The wildcard is the bankruptcy process itself. Let’s start with the general rules about garnishments in Indiana, then look at some affordable legal aid options, and end by a discussion about the effect of bankruptcy on other legal proceedings such as garnishment.
General Rules Of Garnishment
There are also types of garnishments that you need to especially wary of. A state garnishment for child support or to reimburse the state for costs of a child’s medical aid program raises special worries…in large part because the state has very little worry about extensive legal costs and may be able to perfect its garnishment almost immediately. The state also has more power to act quickly to declare a garnishment. This matter of “timing” is important to decide when the garnishment is valid or not… http://caselaw.findlaw .com/in-court-of-appeals/1171293.html.
If this is to be a garnishment order on real property (such as after a home foreclosure), then there are special rules protecting you from a premature garnishment order under Indian law: http://caselaw.findlaw.com/in-court-of-appeals/1309415.html. If you can, challenge the garnishment.
Try To Find Some Affordable Legal Advice
Don’t underestimate the power of self-help in this problem. You may have an advantage, by not having to justify some uncertainties such as what Indiana law says about salary, loans, and garnishment. On the other hand, a lawyer has important ethical considerations, and is very unlikely to want to help (even indirectly) in skirting the law of garnishments. To look into how to take legal matters into your own hands, consider these resources… http://www.in.gov/judiciary/selfservice/.
You can try Indiana legal aid, based on your income: http://www.indianalegalservices .org/. The Indiana bar association has some free assistance, too: http://www.inbar. org/ISBALinks/Committees/ProBono/tabid/149/Default.aspx. Some Indiana law schools also help the general public, such as the Mauer law school… http://www.law. indiana.edu/students/clinic/elmore.shtml.
The Role of Bankruptcy: The “90 Day” Rule
When you receive the garnishment and when you file for bankruptcy are going to be essential.
What you may have going for you is the power of a bankruptcy filing to stop all other state actions. From your question, it seems there is not yet a garnishment order. That helps. If you file for bankruptcy before any garnishment order is actually filed, this makes claims filed before the bankruptcy more likely to be paid (and by inference, a post-filing garnishment is weaker). Still, just because you file for bankruptcy does not mean all prior debts will be ignored…this is especially true of there’s an argument that any transfers were made in anticipation of hiding or sheltering money. You’ll be producing bank records, so if the “advance” you get form the employer is deposited into a bank account, or shows as regular income on wage statements you submit in your filing, then creditors will see it. Here’s a case describing this process, and where a garnishment was received 90 days before filing: http://caselaw.findlaw. com/us-7th-circuit/1118816.html.
But it’s a harder question in this case, since it’s not money that you gotten from selling something, but unearned money you have received. And as the case just mentioned emphasizes, federal law may decide about timing, but Indiana state law will settle whether the money you received “in advance” is personal property: “Under Indiana law a notice of garnishment not only prevents the debtor from withdrawing the funds in his bank account but also gives the judgment creditor who procured the notice a lien against the funds up to the amount of the judgment.”