Garnishment after filing

[spr250]

So I apparently missed a filing yr and had to file my taxes to file my bankruptcy. I had a refund coming back and it was intercepted before the creditor got updated on the automatic stay. All I have found was it had to be paid back immediately, but those where all by a general google search and nothing backed by law. So is there a legal reference point for me to look at so I know the window Im looking at that they have to reimburse me before it turns into an attempt to collect a debt and allows me to go after them. My lawyer says he has dealt with them before and they are a pain. I can see them doing that to wear you down so you decide its not worth the hassle or forget about it.

Thank you

[justbroke]

Yes. It's simply the automatic stay in 11 USC 362. All creditors are prohibited from starting, continuing, or pursuing any debt once the case is filed. While the creditor may have violated the automatic stay in your case, it looks like it's a "technical" violation. You would simply send a notice the creditor and tell them that they violated the automatic stay and demand the money to be returned.

However, there are exceptions to who is NOT affected by 11 USC 362. That typically includes DSO obligations. If you are specifically talking about your DFAS amounts, DFAS actually have a very informative page about the bankruptcy stay:

https://www.dfas.mil/debtandclaims/bankruptcy.html

[spr250]

The debt is AAFES/military starcard. Which is considered unsecured and past the point of protection for them. So legally they do have to give it back. Im just wondering what, if any, the time frame is that they have to give it back. From what it appears, they took it a day or two before receiving notice of my BK filing so I am allowed to get the money back. As for my DFAS overpayment,, thats already been stopped. Wow, thats alot of reading, and didn't understand a word. I can debate like a lawyer but can't speak it. LOL.

[spr250]

Basically, what Im trying to figure out is do they have to immediately have to send a refund the minute they find out about the stay or do they have a window of something like 30 days, 60 or even 90 days or if even ever and requires a court order. I am sure the info is there, but like I said, I simply dont understand the way its written.

[justbroke]

I'm confused about what you mean by "past the point of protection." Are you saying that the creditor, AAFES, used a tax intercept to clawback money that you owe? Or is this AAFES debt totally different and was not caused by a tax incept? Because a garnishment and a tax intercept are very different things. Only certain "creditors" (think IRS, taxing authorities, state domestic support authorities, and certain other governmental agencies) can intercept a tax refund. That's why I'm trying to tell the difference between your DFAS issue and your AAFES issue.

For the DFAS issue, they have a specific email address and phone contact information if you are worried about the timeframe to have a refund. You wrote that you have already taken care of that overpayment

For the AAFES card, I can't tell you that and there is no standard. I don't know what money they took from you and by what method did they levy against your money. It makes a difference about how and when it occurred. If this creditor, AAFES, was able to intercept your "post-filing" tax refund, then that is an issue. I have easily, and not so easily, handled this with both a bank and a ruthless creditor. The bank instantly transferred the money back to my savings account as soon as I told the bankruptcy specialist (and they confirmed everything). The seemingly ruthless creditor, however, was not going down easily!

In general, resolving a stay violation is either an easy one or a difficult one.

To handle the ruthless creditor, and I did have to "handle" them, had to answer a Motion for Sanctions and a Motion to compel Turnover (to recover my money). They ended up settling with me, but it was 4 months of time and 3 court hearings. An attorney, and likely your attorney, doesn't want to get into hearings as I did. Your attorney should be able to send a demand letter to demand return of the money and remind the creditor that the automatic stay was in affect at the time that they "continued" a collection attempt and that they are not a stay-exempt creditor.

The reason that there is no timeline, is because you as the debtor must take affirmative action to call out the stay violation and then pursue your recovery options by filing the appropriate motions and/or complaint.

Personally, I use 7 day demand letters telling creditors that they have 7-days to return the money or that I will immediately file a complaint and/or motion for sanctions with the court. I send these letters certified mail with return receipt to all addresses on the claim (and in PACER), and to a "corporate officer" as required under Rule 9014. In most cases, they comply. I only had two cases in which I filed a complaint and asked for a trial. Both settled.

If all of that seems complex... it's because it can be.

[spr250]

What I mean by protection is like with taxes, you cant discharge them if under 3 yrs old or my DFAS debt that had to be older than 5 yrs old. Both are 2012 or older. Since AAFES is government supported, didn't know if they had any type of protections against bankruptcy. Which if they did, I am sure it aged off like my DFAS debt. So what I can gather from your reply is, there is no legal window in which they have to return the money. So if I want it back, I have to contact them and request the refund and possibly add a time limit and have it submitted to my lawyer to add it to PACER so that if it does esculate there is proof of a violation and a continued disregard to law by not refunding the funds.

AAFES and DFAS are two separate beasts but both governmental/military. AAFES is basically a military Walmart and DFAS is governmental payroll.

So I gotta ask, are you a lawyer or just dealt with BK's enough to learn alot? You are plumb full of info.

[justbroke]

I have dealt with bankruptcy twice and have been a member of BKForum since 2008. There are a lot of other great folks on here as well and some have even filed their own bankruptcy cases (like I did).

I now understand what you mean by the debt being older. Most debt, even to a governmental agency, does not get to enjoy the special 3 year "priority" status that federal taxes have under bankruptcy law. In those cases, governmental debt (except fines and certain other penalties) are dischargeable once they are at least 1 year old. So I agree that this AAFES debt should be dischargeable.

I only say that there's no time limit for them to return the funds because "unless and until" you make a demand and then follow through with involving the court, they may never pay it back.

I used to be paid by DFAS myself (former DoD civilian engineer).