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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. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  4. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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