09
Mar
2021
Nondischargeable Judgment Garnishment: No Automatic Stay Violation
Creditor with nondischargeable judgment may garnish debtor without violating bankruptcy automatic stay.
In the case of In re Embry, the court held that a creditor holding a nondischargable judgment against a debtor may garnish debtor’s assets even though the bankruptcy stay is in effect and the debtor has not been granted a discharge from the bankruptcy court.
Debtor argued that creditor must either wait until a general discharge is granted or lift the bankruptcy stay prior to garnishing debtor’s assets.
The court, however, ruled that:
. . . once a bankruptcy court enters its judgment holding a debt nondischargable, the automatic stay does not preclude execution of the judgment against property of the debtor which is not property of the estate.
Author: Charles R. Harroun, Attorney at Law
This entry was posted
on Tuesday, March 9th, 2021 at 8:59 am and is filed under Bankruptcy, Employees.
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