State Unemployment Agency Violated Discharge Injunction by Garnishing Debtor’s Wages After it had Notice of Bankruptcy Case, but Failed to Object to Discharge

State Unemployment Agency Violated Discharge Injunction by Garnishing Debtor’s Wages After it had Notice of Bankruptcy Case, but Failed to Object to Discharge

Debtors filed a Motion for Contempt against a state unemployment agency, alleging that the agency violated the discharge violation when it garnished the husband Debtor’s wages post-discharge.

The husband had filed several claims for unemployment and had received benefits. The state agency had investigated the husband in order to determine whether he qualified for these benefits. The husband listed the state unemployment agency as a possible creditor on his schedules.  The state agency received notices of the husband’s bankruptcy filing from the court, including the notice that stated the deadline to object to dischargeability of debts.

While the bankruptcy case was pending, the agency sent letters to the husband’s former employers in order to verify verifying husband’s employment status and any earnings for weeks in which he also claimed unemployment benefits.

After this investigation, an agency investigator  sent husband a letter demanding that he make a statement. In that letter, the investigator  wrote that “we have information that you may have failed to properly disclose employment and earnings as indicated on the investigator case history worksheets.” Husband did not respond to the letter.

The Court granted the Debtors a Discharge; the agency did not file an objection to the Discharge.

After the Bankruptcy Court entered husband’s Discharge, the unemployment agency sent husband a notice that he failed to properly disclose employment and earnings as indicated on the investigator case history worksheets. It stated that he could appeal this determination and have a hearing. Husband did not attend the hearing.

 

Log In to READ MORE

Please note, in order to view NACBA Member Content, you must sign in and then visit NEWS. If you are not a NACBA member, you may Become a NACBA Member 

No Comments

Post a Comment