You have garnished funds. You claim a state exemption. before they start collecting. You apply for chapter 7 bankruptcy within 90 days of them starting to garnish. You win a chapter 7 discharge. You claim a federal exemption for the garnished wages in bankruptcy. The trustee does not object. At the meeting of creditors, nobody objects to the claim of exemption for garnished funds. After the discharge order are those garnished funds to be returned to the debtor.
Can those funds be paid to one creditor without the debtor's permission.
This question is best answered by a local attorney.
Who has the garnished funds? Your employer, or the creditor? If your employer has it, you win. It would be a violation of the discharge for the creditor to claim the funds.
If the creditor received the funds prior to you filing the case, I the creditor can keep the money. You can not claim those funds as exempt.
Generally, you need to bring an action to recover the funds before the discharge. It is not automatic. If your discharge was entered before you commenced an action to recover the funds, the creditor gets to keep them in most, if not all, cases.
if the creditor had the funds before you filed then they keep them. If the employer still has the funds or the creditor got them after you filed they are your funds. In fact they should have released the funds upon notification of the bankruptcy filing .At least that is what would happen here in Pa
Chapter 13 Bankruptcy Attorney
Upon the closing of the case all exempt assets revert to the debtor. If your case has been closed you are the proud owner of the money, however ownership of cash is demonstrated by possession. If you do not possess the cash then do you really own it? You may want to contact the person who has your money and demand that they send it to you.
If the creditor recieved funds within 90 days of filing AND it was a no asset chapter 7, you MAY be able to assert a preference action against the garnishing creditor to recover the funds. You should talk to an attorney about what that would entail.