Funds to Trustee?

I'm wondering if the bank's actions are legal. At the beginning of August, a garnishment from a creditor was issued against a personal checking account, where the balance was withdrawn by the bank holding the account and held for said creditor per a judgement filed in court. The person who owns the checking account went to court to file an exemption against the judgement and the court ruled in the person's favor. According to the order which states: "it is ordered and adjudged that the defendant's claim of exemption is granted and it is further ordered that the writ of garnishment issued is hereby dissolved," the owner of the checking account is entitled to get back the withdrawn funds. This person also filed for bankruptcy. According to the bank holding the funds, they are obligated to send the money to a trustee representing the interests of the bankruptcy instead of depositing the money back into the checking account.

I'm thinking that the money belongs back into the checking account since the original Writ of Garnishment was reversed and dissolved by order of the court. Additionally, I'm thinking that bankruptcy laws protect the money in the account against creditors or anyone else until the case is heard in court. The bank's reason for sending the money to the trustee is that the bankruptcy was filed the day before the order to reverse the garnishment was issued. Again, I'm thinking it doesn't matter because the court decision dissolves the garnishment action which was issued and completed before the bankruptcy filing. Very complicated, I know, but if anyone out there can enlighten me on whether the bank is correct in sending the funds to a trustee instead of back into the checking account of the defendant, please let me know. Thanks!!

I assume the bank is considering the money as part of your assets---and feels they are obligated to send the money to the court and allow the court to return the money to you. Did you ask the bank? Perhaps the asked the court what they were to do with the money and the court instructed them to do as they did?

It is my opinion that the bank was correct. But, do ask they to show you their documentation to prove this statement:

"According to the bank holding the funds, they are obligated to send the money to a trustee representing the interests of the bankruptcy instead of depositing the money back into the checking account. "

I do believe the bank is deferring to and working under the auspices of a court order/instruction.

Thanks so much for replying to my initial comment. Again, I know what you are saying but if the judge ruled that the "money" in question is exempt from all creditors, then why would it have to be transferred to anywhere but back to the person it legally belongs to?

My way of thinking on this whole thing is that once a person files bankruptcy, a bank cannot go into the account of its customer and randomly send the money to a trustee. If this is true, it should be also true that the original garnishment is dissolved, and there is no reason to take the money and send it to anywhere except where it rightfully belongs; and that is to the person who holds the checking account. If banks can send money to trustees, then anyone who files bankrutcy can have their money that is held in checking accounts randomly removed and sent to a court trustee at any time. What do you think?

I think it makes perfect sense---have you asked the bankruptcy court? While you and I think it makes sense, the law , at times, clearly doesnt. My specialization is in criminal law, so I am not "up" on the rapidly changing canon of bankruptcy laws. It would be worth a call to the court to ask.

Thanks, I agree; I already am planning to call the office of the judge tomorrow to find out their opinion on this matter. Thanks again for your thoughful insight.

Good going. The bank was overreaching. They have no right to send that money anywhere. They have NO order from the court to do so. They are interfering with lawfully ordered return to the account owner.