Pierce v. Collection Assocs., Inc., No. 14-1365 (8th Cir. 2015)
Annotate this CaseCollection Associates garnished a total of $858.98 in wages Brandon earned during six pay periods. Brandon’s employer sent the first four garnishments, $562.78, to the state court that issued the garnishment order. That court delivered the payments to Collection Associates, under Neb. Rev. Stat. 25-1056(2). Brandon and his wife filed a bankruptcy petition and notified the state court they had done so. When the state court received the final two garnishments, totaling $296.20, instead of delivering those funds to Collection Associates, it returned the money to Brandon’s employer, which refunded the money to Brandon. The debtors then sought to avoid and recover the funds garnished during the preference period. The bankruptcy court found the preference action barred by the defense for consumer debtor payments under $600. The Bankruptcy Appellate Panel affirmed. The Eighth Circuit agreed that the defense applies because the Pierces sought to avoid the transfer of less than $600.
Court Description: Civil case - Bankruptcy The bankruptcy court correctly determined that the Pierces' avoidance action was barred by the defense for consumer debtor payments under $600 provided in 11 U.S.C. Sec. 547(c)(8). Judge Colloton, dissenting.
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