Terri Kae Krivohlavek v. Boys Town Federal Credit Union

**Worker Wins Case Against Credit Union for Illegal Payroll Deductions During Bankruptcy** This case involved Terri Kae Krivohlavek, who filed for bankruptcy while working at Boys Town Federal Credit Union. Even after she filed for bankruptcy, the credit union continued automatically taking money from her paychecks to pay down a loan she owed them. When someone files for bankruptcy, federal law creates an "automatic stay" that immediately stops most debt collection activities, including payroll deductions. Krivohlavek asked the bankruptcy court to punish the credit union for violating this rule, but the lower court said no. She appealed this decision. The appeals court sided with Krivohlavek, ruling that the credit union broke federal bankruptcy law by continuing the payroll deductions after her bankruptcy filing. The court sent the case back to determine what penalties the credit union should face for this violation. **Why this matters for workers:** If you file for bankruptcy, your employer generally cannot keep taking money from your paycheck to pay debts you owe them or other creditors. This protection exists even when you previously agreed to automatic deductions. Workers should know they can seek court penalties if employers ignore bankruptcy protections and continue unauthorized payroll deductions.