How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Type Your Bankruptcy Law Question Here...
WALLSTREETESQ is online now
A new question is answered every 9 seconds

i have just filed Ch 7 in MA. One of the creditors - a bank

This answer was rated:

i have just filed Ch 7 in MA. One of the creditors - a bank - had obtained a trustee attachment on funds in a personal bank account prior to the filing in an open case that was just filed against me for a personal guarantee that I had made on a business loan (where the business failed). What happens to that money now ? Do they have to release it ?


Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.


Once you file a bankruptcy all garnishments and collections efforts have to stop and any monet taken must be returned in most cases.

Customer: So do I notify the bank (the one holding the money as a trustee) that I have filed and to return it to my account ?

you should contact your bank, and the creditor as well, they may ask for a copy of the petition filed and the case number XXXXX well.

Customer: The bank that is suing me and that got the ex parte attachment put thru in the first place is a listed creditor and will be notified of the filing shortly, but I wasn't necessarily looking to notify them sooner rather then later. Could I just send a copy of the petition to my bank and request a release ?
Customer: Also, if and when it is released, is it my money to use/withdraw, etc., or am I restricted by the filing in how I use it ?

Yes start with the bank, notify them of the case number, but the law allows all funds taken 90 days prior to be returned, so you may want to advise the creditor, he will be reciving notice of the filing anyway within a few days.


Once the money is given back it is part of the bankruptcy estate and unless it is exempted it would go into paying your creditors.

Customer: ok great - I appreciate the help. Do I need to cite a certain MGL or citation or will my bank know that it should be released ?
Customer: btw - what would exempt it ?

The bank would know, in fact they willl know that a violation of the Federal automatic stay cn result in fines from the federal courts.


The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. 11 U.S.C. 362.



The automatic stay prohibits

  • Beginning or continuing law suits

  • Collection calls

  • Repossessions

  • Foreclosure sales

  • Garnishment or levies

The automatic stay remains in effect until

Customer: ok - thanks this is great and extremely thorough - and any thoughts on what would make it exempt ? Would be nice to get some of it back to clean up some stuff

every state has their own exemptions,


If you are in Mass

Customer: i am

Go to the above link it has the 2011 new bankruptcy exemptions.

Customer: ok again you've been a great help and unless you have any more info that you think might help I'll accept

If you will be recieving a significant amount such as $10,000 or more, I would dismiss the bankruptcy and use the money for yourself, and then consider a bankruptcy later, the stay will remain for a few months.


If you have any further questions please do not hesitate to ask.

Customer: its $ 8100 and the filing was done to stop a civil suit that was about to go to trial that I couldn't afford to defend or to lose so I could get it released, then dismiss the filing, take the money, and then re-file later ?
Customer: and this was not the same suit that is associated with the ex parte attachment

yes, but wait till the amount is given back to you, and do not attend the chapter 7 341 hearing in most cases the trustee would dismiss the case in three months or longer.


The lawsuits would not be able to start until after the three month window, when the case is actually dismissed.

Customer: I am definitely going to give that some serious thought
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you
Good luck, and if satisfied with our service please press the accept button so we can receive credit.
Customer: replied 5 years ago.
Follow up question on the above - the bank has refused to release/return the funds previously held in the civil matter even though I have exhaustively provided them with the Suggestion of Bankruptcy filing with the court, the petition itself, and 2 demand letters. They have said that I need to get a release from the opposing counsel in the case before they are allowed to release the funds as the original trustee attachment is still valid and is only "stayed" not released. Any suggestions ? At this point I think I need to file a motion to the court in the civil matter to get them to vacate the attachment ?? Not sure they will do that as they have already said that the Sugg of Bankruptcy" was as much as anyone would need . . . I will treat this as a new question payment-wise.
If you filed bankruptcy the money should be released and if they are stating the anotehr party has an interest in the monies, you need to add them to the bankruptcy petition and then send them a notice of your filing.

If you have not filed, they do not have to release the money.

If you are in bankruptcy look at the Court order linked above and file a motion in bankruptcy court to force the release.

Also, you can have the trustee of the bankruptcy court stating he has no interest in the garnished money and that it should be released as well.
Customer: replied 5 years ago.
Thanks for the follow up. I have filed bankruptcy and the bank (and debt) in question is listed on the petition. I can't get that link to work so could I ask you to send it again ? Also, what court woudl I file the motion for release from - the civil court where the attachment came from or the bankruptcy court ? and wouldn't the bankruptcy trustee/court WANT to get that money as well rather then say they have no interest in it and just allow it to be released to me ?

Look at the above link, also you would file the motion with the bankruptcy court, and if the trustee will waive the claim the funds will be released, the trustee may take some of it, but it is up to him and if you have any exempt funds.

Related Bankruptcy Law Questions