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I just filed my chapter 7 this week. I didn't list my future earnings as exempt on official form 6c, can my wages be garnished?

Fremont, IN |

I have 2 questions. First, if I didn't list my future earnings from my employment on official form 6c to be exempt, can they be garnished by the bankruptcy court or trustee since it would be considered part of the estate and assets? Second, I don't have many assets to claim as exempt, they amount to around $8500, I was told by a bankruptcy preparer to use 34-2-18-1(a)(1); for exemption code for my vehicle, clothing, personal items, household items, but I cant find that code anywhere under Indiana code, is that correct for Indiana? Also, I used 34-55-10-2(b)(2) for exemption code for my upcoming tax refund, is that correct? My 341 meeting isn't until March 4, I would still have time to amend. If this information isn't right, what is correct? I have NO money to retain an attorney. HELP!

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Attorney answers 3

Posted

Post petition earning are not generally part of the bankruptcy estate that a Chapter 7 trustee can get unless the right had vested (e.g., a bonus or profit sharing award). Tax refunds have only two exemptions that are applicable (1) the general intangible exemption which total $350.00 for all intangibles and (2) the earned income credit exemption which is unlimited to the extent of the earned income credit for both state and federal tax refunds. Hard personal property and non residential real estate exemption is around $9250.00.
I can only assume that you had to file quickly. Filing a bankruptcy is voluntary but dismissing one can only be done without the objection of the Trustee. I hope your bankruptcy petition preparer advised you of all documents that you will need to provide to the Chapter 7 Trustee by February 22, 2014.

Good Luck

Asker

Posted

Thank you for your comments! I feel a little better knowing they might not be able to take any of my future earnings. I don't get profit sharing or bonuses, just my general income from working. Also, most of my tax refund will be earned income credit due to the way I file throughout the year to claim all dependants, so they don't take too many taxes out of my check. Yes, I had to file quickly due to upcoming garnishment court date for some of my husbands medical bills. I did fill out all other forms correctly. I spent hours and hours doing research to make sure, however, I trusted that the exemption codes they input for me were correct and didn't actually check them until after I filed. When I wasn't able to find that particular code under Indiana exemptions, I got really worried, hence me finding this website to ask the questions. The only thing I am really worried about now, is if those 2 particular exemption codes I used are the correct ones. 34-2-18-1(a)(1); is what I used for all my exemptions (clothing, auto, personal property, household misc) but I cant find this code anywhere to see if its a valid exemption code. I was able to find code 34-55-10-2(b)(2) and that is what is used for my upcoming tax refund and I do think this one may be accurate. Also, I wasn't sure if I had to include on 6c any upcoming paychecks after filing. Thank you though, for responding! I really appreciate it!

Posted

Yikes!! Your "bankruptcy preparer" is practicing law and violating the Bankruptcy Code. The sad part is that you have no malpractice claim against him/her because s/he isn't licensed to practice. Did the "bankruptcy preparer" disclose the financial arrangement as required? You should report your situation to the US Trustee and hope your own trustee will be in a favorable mood. Chances are your schedules need to be amended to properly claim the exemptions. A consultation with coaching from an experienced bankruptcy practitioner could be helpful and quite cost-effective unless your local court does not permit "unbundled" services and licensed counsel could not safely file their own disclosure.

Best wishes for an outcome you can accept, and please remember to designate a best answer.

This answer is offered as a public service for general information only and may not be relied upon as legal advice.

Asker

Posted

Thank you for responding. I honestly do not have any money to pay for an attorney, I live paycheck to paycheck and can barely get by with the bills I already have. The reason for my bankruptcy is because people are trying to garnish my wages for medical bills of my husbands. I wouldn't say the preparer gave me any "legal" advice, however, they had input those codes for me on my schedule and when I was doing my own research just to make sure everything was correct, I couldn't find that particular exemption code anywhere. My mistake for waiting until after I filed to look up that code. Yes, perhaps I could find an attorney that will give me a free consultation to look over my forms. I know I did everything else right, but the exemptions are the most important. Thank you again!

Posted

Ms. Sinclair is right. A bankruptcy petition preparer is not allowed to give you legal advice. You say there is no money to hire an attorney, but you may have assets that can be taken by the trustee if not properly exempted, and that can turn out to be a lot more expensive. If things aren't done correctly it is normally a lot more expensive to have an attorney step in and clean things up.

While you may get some good information from an Indiana attorney on this forum, there is no substitute for having your own attorney sit down with you and go through your paperwork with you. So do yourself a favor and find a reputable bankruptcy attorney near where you live and make an appointment. Most give a free initial consultation.

The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.

Christopher Daniel Leroi

Christopher Daniel Leroi

Posted

Excellent response as always by Ms. Larkin

Asker

Posted

Thank you, I appreciate all your comments. I guess my most important assets would be my vehicle and my upcoming paychecks. Other than that, I really don't have anything worth selling to be quite honest. My husbands auto is only worth about $1000 and my car I am still paying on but the equity is probably only about $2000 and of course, I do have a good paying job even though we live paycheck to paycheck. I just don't want to have to worry about garnishments when I can barely afford to pay my regular bills. With all the hours I have spent doing research to make sure everything else was filled out correctly, I stupidly neglected to make sure those were the correct exemption codes until after I filed. I believe, schedule c would be the only form I have to be worried about at this point. I will try and make an appointment to get a free consultation and get some good advice. Thank you again!

Shaye Larkin

Shaye Larkin

Posted

Very good idea - good luck to you.

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