I hope I am posting this within the correct forum, so if my questions needs to go under debt collection, someone please let me know?
To give a quick history...I and my wife filed for Chapter 13 last year in 2012 and had our final court date in October of 2012. We are now in our repayment period to the trustee and have made all payments on time since required. We are simply in 5 months into our 5 year repayment plan.
The issue... Last week after my wife was paid, she went to her employer's bank in order to cash her check. After giving the check to the teller, the teller stepped away and then a supervisor returned. They told her that she owed them on a credit card debt from last year (2012) and that they were not going to give her the money from her check, that it needed to go towards paying the debt. She tried explaining to them about the bankruptcy, but they still refused. It was at this time I received a call from her while she was crying, and after hearing what happened, rushed down to the bank.
Speaking with the supervisory teller, I explained to her that we had filed chapter 13 and the debt she was referencing was discharged in the bankruptcy proceedings. She went on to explain that they had no record of that ever being completed. My exact comments to her were that it did indeed occur and that we are not responsible for the banks inability to accurately manage administrative tasks. I continued to argue with her on this and then they came back and told us that they would give us the money from the check if we agreed to pay $200.00 dollars toward the debt.
At this point I told her that I would like her name and the name of the "unseen" supervisor in another room as I was going to speak to an attorney and take legal action as they were attempting to garnish my wife's wages without any prior legal notices or proceedings. After this she went away and came back about 10 minutes later and then cashed our check and gave my wife her money.
So my question is, how wrong is this action by the bank? My wife was very upset by this and all her friends saw this happen which embarrassed her tremendously! Later, she actually got sick from it as it stressed her out so much. Can this bank continue to do this, or is their actions illegal and can I take legal action against them?

