A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.
The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.
Wage Garnishment
The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact the debtor's employer and require the employer to deduct a certain portion of the debtor's wages each pay period and send the money to the creditor. However, several states, including Texas, Pennsylvania, North Carolina, and South Carolina, do not allow wage garnishment for the enforcement of most judgments. In several other states, such as New Hampshire, wage garnishment is not the "preferred" method of judgment enforcement because, although possible, it is a tedious and time consuming process for creditors.
In most states, creditors are allowed to garnish between 10% and 25% of your wages, with the percentage allowed being determined by each state.
Alabama garnishment rules are found in Title 35 Chapter 11 Article 5. In general, Alabma follows the federal rules for the amount of a garnishment, which allows up to 25% of a worker's wages to be garnished. See the Dept. of Labor's Employment Law Guide - Wage Garnishment and the Dept. of the Treasury's Answers About Garnishments. Municipal and state employees may be garnished.
Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law. Garnishment of Social Security and pensions may be allowed for child support.
Generally speaking, 401k or other retirement funds are exempt from garnishment. It is advisable to have those funds specifically deposited into a separate bank account to ensure financial accounting if you are concerned with a garnishment on those payments. However, there appears to be no provision for life insurance.
If you reside in another state, see the Bills.com Wage Garnishment article to learn more.
Levy Bank Accounts
A levy means that the creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.
In Alabama, administrative levy is allowed under for recovery of taxes and unpaid child support. In Alabama, levy of bank accounts is called garnishment. AlabamaLegalHelp.org offers online court forms a consumer can complete to request to stop a garnishment of a bank account.
If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.
Lien
A lien is an encumbrance -- a claim -- on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.
Alabama laws governing liens are Title 35, Chapter 11. Under Section 6-9-211, "Every judgment, a certificate of which has been filed as provided in Section 6-9-210, shall be a lien in the county where filed on all property of the defendant which is subject to levy and sale under execution, and such lien shall continue for 10 years after the date of such judgment..." Mechanics and contractors (and similar laborers and professionals) have the right to place a lien on a property.
If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.
Alabama Statutes of Limitations
Each state has is own statute of limitations on judgments. Statute of Limitations for Alabama is Title 6, Chapter 2. The statute of limits for open accounts (credit cards) is three years (Section 6-2-37), written contracts are six or 10 years depending on the circumstances (Section 6-2-33 and 6-2-34), and spoken contracts are six years.
Alabama Foreclosure
See the Bills.com resource Alabama foreclosure to learn more about the rules surrounding foreclosure in this state.
Recommendation
Consult with an Alabama attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Alabama.
I hope this information helps you Find. Learn & Save.
Best,
Bill
Burke, VA | March 02, 2013
March 02, 2013
Calera, AL | January 04, 2013
January 04, 2013
Consult with a lawyer in your state who has consumer law or civil litigation experience. Bring all of the documents you have regarding your old lease, and the copy of your credit report showing the judgment to your meeting. Your lawyer will advise you if you can file a motion to vacate the judgment, and will help you do so.
You asked what self-help steps you can take. Some county courts have Web sites that contain public documents regarding civil matters. Take a few minutes to see if the county you reside in now, or if different, the county where your old property was located, has any records online about your case. You may need to visit the county court house civil division in person to request a copy of the judgment filed against you.
You asked about wage garnishment rules. Most states allow judgment-creditors to ask for a wage garnishment order. See the link I just mentioned to learn how much can be garnished from your disposable earnings.
Montgomery, AL | October 05, 2012
October 05, 2012
You mentioned you were not aware of the judgment. You should have been had the creditor followed your state's civil procedure rules properly. Consult with a lawyer in your state who has civil litigation or consumer law experience. Ask him or her about filing a motion to vacate the judgment on the grounds that the plaintiff did not give the defendant (you) adequate and proper notice of the action filed against you. If this motion is granted, it will quash the judgment, which will void the wage garnishment.
Smyrna, GA | August 09, 2012
August 13, 2012
If the judgment-creditor is an original creditor, then it is possible the Alabama court had personal jurisdiction over you for reasons you did not mention, but that's complete speculation on my part. Which bring me back to my first point: Consult with a lawyer now to learn your rights and what actions you can take.
Montgomery, AL | June 14, 2012
June 15, 2012
Scottsboro, AL | May 21, 2012
May 21, 2012
Given the large size of his debts, I think that speaking with a bankruptcy attorney is a good choice. If he qualifies for Chapter 7 BK, he can file and discharge his debts or use that fact as leverage to negotiate settlements at a far lower cost than the settlement he was offered.
Madison, AL | May 19, 2012
May 21, 2012
Dayton, OH | May 01, 2012
May 02, 2012
Theodore, AL | April 18, 2012
April 18, 2012
- Take the person to small claims court.
- Consult with an attorney about the laws in Alabama regarding "defrauding an innkeeper."
Wanaque, NJ | March 22, 2012
March 22, 2012
Consult with a lawyer in Alabama to learn what remedies you may have available. If you can show a court the father is hiding assets in his spouse's name, you may be able to pursue those assets. I hope you find success.
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