The Debtor claimed as exempt on Schedule C garnished funds as an avoidable preference pursuant to Virginia Code § 34-4 and then filed a complaint seeking to avoid and recover what he claimed was a preferential transfer to the judgment creditor under 11 U.S.C. §§ 542 and 547. The creditor argued that the transfer of funds occurred outside the 90-day preference period. Following In re Wilkinson, 196 B.R. 311 (Bankr. E.D. Va. 1996), the Court found that the relevant transfer date for the purpose of § 547(b) was the date that the garnishment lien attached to the Debtor’s wages under Virginia law. In this case, the petition was filed on September 24, 2018; therefore the 90-day preference period began on June 26, 2018. The creditor filed the garnishment summons on February 27, 2018, pursuant to which the creditor’s lien attached to the Debtor’s wages paid between March 26, 2018 and May 11, 2018. The Debtor thus earned his wages and his employer paid those withheld funds to the General District Court, all prior to the start of the 90-day preference period. Therefore, the Court denied the Debtor’s request to recover the funds under § 547(b).
Thursday, June 13, 2019