Strange post discharge payroll problem.

[memuzz]

My husband and I filed a chapter 13 in 2006. Our case was paid off and discharged in July 2012. We had a few extra claims and it took longer to pay off.

My husband is paid weekly and we paid $253 weekly to the court.
Our garnishment order was lifted the first week of July 2012. The case was successfully discharged by the court and our Trustee by the end of July 2012.
I receive a pending deposit notice through our bank's online website. It will tell me when payroll deposits my husband's paycheck into our bank account.
We've have never had problems with any deposits since he started working there over 10 years ago!

Well, yesterday was a different story. My husband is salaried and I noticed the check was the same as it was when we were paying off the case. It was exactly $253 short. I know we don't owe anybody after living on nothing for over 5 years. I then realized it was the same amount as the bankruptcy payments!
I had my husband call his HR payroll department and low and behold the payroll clerk deducted the garnishment again! The HR manager issued us a check thankfully since it is our rent this week.

I called my former trustee's office and there livid about that type of error. The representative wanted to know the HR manager's name and phone number and wanted it right then and there. She called up the manager and explained that the case is discharged and to make sure that there are no further mistakes on my husband's check. We have since moved to a new residence since our case was discharged. Could the company got in trouble garnishing a discharged debtor's paycheck? Thanks.

[AngelinaCat]

Could the company got in trouble garnishing a discharged debtor's paycheck? Thanks.

I don't know for sure, but I would think they could get in trouble, and deservedly so. Somebody in your husband's company's HR department had best be looking for other employment.

[memuzz]

I went to my bank this afternoon to put the check in the bank. The teller told me that this isn't the first time that my husband's payroll has shorted paychecks. If I ever made a mistake like that when I was working I would have been fired. I know the economy is still bad where I live; however, out of over 65 to 70 paychecks since our garnishment ends and the clerk deducts the garnishment! I have secretarial and bookkeeping training. In accounting, a person who is salaried receives basically the same paycheck every week. You are suppose to double check the figures before submitting for payout. The clerk isn't doing her job.

We recently had a problem with a bottom feeder third party collection agency try to collect on a paid off debt that was discharged. The trustee threatened them with all types of fines if they didn't stop harassing us about the debt. So I am if the company did not repay us the company could have been fined. You think it's finally over once you get the discharge papers in your hands but even 14 months later we're still fighting the good fight. Our case will be removed from our credit files this next month! I'm looking forward to that finally!

[andy158]

I have read here that many have been plagued by third party collections still trying in vain to collect on debts after discharge. It is not legal and they are hoping you might fall for their threats and just pay up. A firm "let me contact my attorney about this"
should stop the harassment.

[justbroke]

This happens more often than you think, and it is not punishable. First, the Wage Deduction Order is not a garnishment. It is a court wage order to redirect money. It behaves like a garnishment, but isn't a garnishment. What typically happens is that the employer is notified by letter. When my Wage Deduction Order was first issued in my Chapter 13, it somehow did not make it to the correct department or even to my employer (no one knows). This caused my wage deductions to not be made for 3 months (and I was on a monthly deduction).

When the second wage deduction order came through, it was processed within a week, which is about the expected turnaround. Many companies will send court orders through their legal department, so even if it does reach the payroll department, it will almost always get redirected to the legal department for review... because it's a court order.

You did everything correctly. I do not see any issue here. It was quickly remedied by your employer. I went for 2 months of continued wage deduction orders after my conversion to Chapter 7! The Trustee was holding over $11,000 by the time I had it stopped! (I then received a second post conversion check form the Trustee for over $3,000.) These things happen. We would all like for it not to happen, but it does happen.