BUSINESS LAW -Automatic Stay” Problem: The debtor borrowed $10,000

QUESTION

“Automatic Stay” Problem: The debtor borrowed $10,000 from the Finance Company to pay for a vacation. He later defaulted on the note, and Finance Company obtained a judgment against him. On January 1, Finance Company served an income execution (or notice of garnishment) on the Law School where he teaches the Accounting for Lawyers Course as an adjunct professor. In accordance with the notice of garnishment, the Law School began paying a percentage of the debtor’s weekly earnings to the Finance Company. On January 15, the debtor filed a Chapter 7 petition. On January 31, the Law School made another payment to the Finance Company in accordance with the garnishment. What result? Read § 362(a) of the bankruptcy code. What is the debtor’s problem and is there a solution for him?

ANSWER:

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