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COA: student loan funds exempt from garnishment

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The Court of Appeals today found that student loan funds that had been deposited in a personal account were exempt when it came to whether those funds could be taken from a defendant’s bank account to satisfy a judgment regarding legal fees the defendant owed to the plaintiff.

In the case Nikki Brindle v. Patrick J. Arata , No. 02A05-1004-SC-239, in June 2009, Nikki Brindle and Patrick Arata “entered into an agreed judgment in favor of Arata on a debt incurred for provision of legal services,” wrote Court of Appeals Judge Cale J. Bradford.

On March 11, Arata initiated proceedings to seek funds from Brindle’s bank account at National City Bank. The bank replied March 22 that she had $3,367.01 in her account.

But on March 17, Brindle filed an exemption claim and requested a hearing where she introduced a voucher, dated Feb. 10, from the Academy of Art University.

That voucher indicated she would receive a check for $3,268, the amount left over after her student loan provider paid tuition to the university. Her bank records indicated a deposit for $3,271 into her account that occurred on March 1. She said the deposit was from her student loan.

On March 26, the trial court denied her exemption claim and ordered National City Bank to send to the Allen County Clerk of Courts all funds in her account except $300.

Although the trial court found that by depositing her student loan check into an account with personal funds those funds lost their exempt status under federal law regarding wage garnishments, section 1095a, the Court of Appeals disagreed.

“Simply put, the plain language of section 1095a exempts student loan funds and property traceable to those funds from garnishment or attachment, and there is no provision to which either party points us, or of which we are aware, that terminates this status, whether by deposit in a personal bank account or otherwise. … We believe that a contrary conclusion would effectively eviscerate the protections of section 1095a and render it all but meaningless, a result we doubt was intended by Congress. If the protections of section 1095a were lost upon deposit into a personal bank account, one is left to wonder what the point of the section is, when almost every recipient of student funds will surely do just that,” Judge Bradford wrote.
 

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  1. Paul Ogden doing a fine job of remembering his peer Gary Welsh with the post below and a call for an Indy gettogether to celebrate Gary .... http://www.ogdenonpolitics.com/2016/05/indiana-loses-citizen-journalist-giant.html Castaways of Indiana, unite!

  2. It's unfortunate that someone has attempted to hijack the comments to promote his own business. This is not an article discussing the means of preserving the record; no matter how it's accomplished, ethics and impartiality are paramount concerns. When a party to litigation contracts directly with a reporting firm, it creates, at the very least, the appearance of a conflict of interest. Court reporters, attorneys and judges are officers of the court and must abide by court rules as well as state and federal laws. Parties to litigation have no such ethical responsibilities. Would we accept insurance companies contracting with judges? This practice effectively shifts costs to the party who can least afford it while reducing costs for the party with the most resources. The success of our justice system depends on equal access for all, not just for those who have the deepest pockets.

  3. As a licensed court reporter in California, I have to say that I'm sure that at some point we will be replaced by speech recognition. However, from what I've seen of it so far, it's a lot farther away than three years. It doesn't sound like Mr. Hubbard has ever sat in a courtroom or a deposition room where testimony is being given. Not all procedures are the same, and often they become quite heated with the ends of question and beginning of answers overlapping. The human mind can discern the words to a certain extent in those cases, but I doubt very much that a computer can yet. There is also the issue of very heavy accents and mumbling. People speak very fast nowadays, and in order to do that, they generally slur everything together, they drop or swallow words like "the" and "and." Voice recognition might be able to produce some form of a transcript, but I'd be very surprised if it produces an accurate or verbatim transcript, as is required in the legal world.

  4. Really enjoyed the profile. Congratulations to Craig on living the dream, and kudos to the pros who got involved to help him realize the vision.

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