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Judgment Garnishment
Question: WHAT WILL HAPPEN WHEN JUDGEMENT HAS BEEN FILED AGAINST YOU AT THE COURTHOUSE?
Answer: The answer to your question depends primarily on your state of residence, as each state regulates what actions judgment holders can to enforce judgments they have obtained.
The most common method used by judgment creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact your employer and require your employer todeduct a certain portion of your 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, while possible, it is a tedious and time consuming process for creditors. In most states, creditors are allowed to garnish wages between 10% and 25% of your income, with the percentage allowed being determined by each state. For example, if you live in California, which allows for 25% wage garnishment, and you take home $2,000 per month, a judgment creditor could garnish you at the rate of $500 per month until the debt is paid off. Keep in mind that, generally, only one garnishment is allowed at a time, so if you have several judgments against you, the one who contacted your employer first would be paid first from the garnishment, then the second, and so on. Another important point to remember is that Social Security benefits, pension payments, and many other types
of income for the elderly and disabled, are exempt from garnishment, which means that most elderly Americans do not need to fear wage garnishment if they are unable to pay their bills.
Another option for a creditor trying to enforce a judgment is to request that your bank to place a levy on your bank account. Basically, this means that the creditor has the right to take whatever money in your 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, you 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 you should carefully review your state’s laws to find out if your bank account can be levied.
The third common way that creditors enforce judgments against consumers is by placing liens on properties owned by judgment debtors. For example, if you own a home, a creditor with a judgment against you will likely place a lien on your home, meaning that if you sell or refinance your home, you 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 you have in your home, then the lien may prevent you from selling or refinancing until you can pay off the judgment. Again, every state has its own rules about property liens, so if you have a judgment against you and own property, you should review your state’s laws to find out what your creditor can and cannot do to enforce its judgment.
To learn more about your state’s laws regarding the enforcement of judgments, I encourage you to visit
Garnishment State Laws
If you select your state, you can review your states laws regarding what action judgment creditors can take against you. If you have a judgment against you, I encourage you to consult with an attorney licensed in your state to find out how the judgment will affect you, based on your individual financial circumstances. I wish you the best of luck in resolving the judgment against you, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Yolanda on Wednesday 26th March 2008 11:42
I think I'm about to have a judgement placed against for an unpaid balance at a supply store I had an account with ,..I live in SC ,so I know they are not able to garnish my wages ,but my concern is will try to put a levy on my bank account ,I'm not sure how common levying a bank account is in SC
2. Posted by Bills on Wednesday 26th March 2008 12:38
I cannot say for sure as to how common, a bank levy is in SC, but you cannot rule out the possibility. The best place to ask would be your bank itself.
3. Posted by Lois on Monday 31st March 2008 13:51
Can a Bank in New York State levy a lien against property I hold in Texas? Also can they put a restraining notice against a checking account in Texas?
4. Posted by bill@bills.com on Monday 31st March 2008 17:13
I am guessing your question pertains to a judgment. I am not sure if the bank in New York can put a lien on your property in Texas, given that Texas has homestead protection if the property is your primary residence. On the other hand the bank may succeed in doing so if it can establish that the home in Texas is not your primary residence. Either way, doesn’t take my word for it; contact a qualified attorney to clarify the ramifications of your situation. The creditor can locate any monies you have in bank accounts and seize them. There are businesses that specialize in helping creditors and debt collection agencies locate all of your assets, including all of your bank accounts. If the creditor finds any money you have that is not exempt from seizure by your state's laws, it will use the judgment to levy your bank account.
5. Posted by SEAN TAYLOR on Wednesday 23rd April 2008 08:46
i had a judgement filed against myself by wolpoff & abramson for a unpaid cell phone bill from 6 years ago. the bill was unjust but i did not fight it. these people put a levy on my wifes' and i account. my wife opened a separate account under her name only. right now there is a hold on my account for approx. $2248.00, there is no money going in to this account, until our stimulus check is deposited in may. the funds would go directly to those people. my wife and i need this money, w&a's paralegal say tere is nothing they can work out. is there any way to get this hold off my bank account? thank-you for your advice.
6. Posted by Bill on Wednesday 23rd April 2008 09:58
If the judgment has already passed, there is little you can do to remove this bank lien. You can try to open a different account or deposit the stimulus check into your wife's account.
7. Posted by REBECCA on Friday 9th May 2008 08:15
I was unaware that SC could not garnish wages. Is this true? My (small husband/wife owned) employer garnishs peoples wages on a regular basis. Is this legal?
8. Posted by Bill on Friday 9th May 2008 15:36
Looks like you are right (http://www.bcsalliance.com/debt1_southcarolina.html). Wages seem to be a 100% exempt.
9. Posted by Maria on Saturday 7th June 2008 07:01
will it be possible if we can stop the levy of getting money to our bank account?The bank gave me the number to call the company responsible of taking out the money & was advised to call back on the 20th of June to make payment arrangment? If the judgement was made do we still need to make payment arrangement?
10. Posted by Bill on Monday 9th June 2008 08:16
Even if the judgment was issued against you, you can still talk to the company to make other payment arrangements so that your bank account is not garnished. You need to ask for a copy of the judgment to see what the terms of the repayment plan are. In case you are fine with the current arrangement, then there is nothing that you need to do, the payments will continue until the debt is paid off.
11. Posted by PRISCILLA PADILLA on Wednesday 18th June 2008 18:31
my bank account closed my access to my atm card but my account is still open why is that and they show no restraints on my account that supposedly has a levy on it how can i find out if this is just a minor mistake i never received any letter saying i owed anybody and i checked my credit report from all three credit companies? please help i'am scared
12. Posted by Bill on Thursday 19th June 2008 08:21
There is no need to panic, just speak with your bank to see what is wrong and tell them that you need access to your ATM card. For all you know its a minor issue such as the validity of the card having expired.
13. Posted by Sam on Monday 23rd June 2008 20:20
If a debt collector has a judgment issued against me in one state. If I open a bank account in another state, are they automatically entitled to seize assets from that bank account without a judgment obtained from that particular state?
14. Posted by Sam on Tuesday 24th June 2008 11:35
Once a debt collector is successful in getting a judgment in their favor, they can pursue to garnish your bank account if the state law allows it. This does not mean that they have to get another judgment in the current state that you reside in. If the state that you currently reside in allows garnishments of your bank accounts, then the debt collector will be able to pursue their collection efforts here as well. For more information on collection laws, please visit http://www.bills.com/collection-laws/.