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garnishment of wages and life insurance premiums


Guest jigpsu100
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Guest jigpsu100

We have a situation where we are required to garnish wages for a participant pursuant to a Chapter 13 Bankruptcy. Recently the participant has had a reduction in hours and can no longer pay her group term and short term disability premiums because the garnishment consists of her entire check. Should we simply cancel the insurance? Should the participant be given a period of time to make up the premiums? Any help would be appreciated. Thanks.

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I suggest that you seek direction from the Bankruptcy Court itself (or Trustee).

In the cases that I have seen, salary reduction/deductions were not allowed except as allowed by the Court so the fact that hours were reduced might have no bearing.

I also wonder whether the Automatic Stay would prohibit you from cancelling the insurance aside from the fact that you are not the insurer and the premium is not owed to you so you are not a Creditor (nor agent of the Creditor).

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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