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Georgia Collection Laws

Can a Georgia creditor levy my bank account, put a lien on my property, or garnish my wages?

I have a debt I cannot repay in Georgia that I cannot repay. What can creditors do here?

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Highlights

  • Examine what kind of collections can occur when you live in Georgia and have a judgment against you.
  • Review Georgia rules for the statute of limitations on debt collection.
  • Consult with a Georgia attorney.

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.

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

Georgia's Garnishment rules are found in O.C.G.A. Title 18 Chapter 4 Article 4. In general, Georgia 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.

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 Georgia, levy is allowed under O.C.G.A. § 9-13-50 & O.C.G.A. § 9-13-16. Levy is allowed if the plaintiff possesses a legal instrument known as Fieri Facias, which is a writ commanding the sheriff to seize and sell as much of a debtor's property as is necessary to satisfy a creditor's claim.

Levy is rarely used in Georgia, perhaps due to the state's myriad rules regarding the collection method.

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.

O.C.G.A. § 9-12-81 allows a lien for a money judgment. Under O.C.G.A. § 44-14-361, mechanics and contractors (and similar laborers and professionals) have the right to place a lien on a property. Georgia lien law for contractors is intricate, strictly construed, and offers several defenses for homeowners.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Georgia Statutes of Limitations

Each state has is own statute of limitations on contracts and judgments. Under O.C.G.A. § 9-3-25, the statute of limitations on an open account (i.e., credit card) is 4 years. However, the Court of Appeals of Georgia held in Hill v. American Express that a credit card contract is a written contract, and not open. This 2008 decision may or may not set precedent on all state courts in Georgia. (Editor's note: Regardless of a person's perspective what statutes of limitations should apply to credit cards, this finding is not a good example of judicial writing. The decision is conclusory, and ignores the plain-language in Georgia statute. For those reasons, this decision is vulnerable to be reversed in the future.)

See also the Bills.com resource Georgia Statute of Limitations for additional discussion of statutes of limitations and credit cards in Georgia.

Under O.C.G.A. § 9-3-24, written contracts have a 6-year statute of limitations. A contract under seal has a 20-year statute of limitations. Foreign judgments are valid for 5 years (§ 9-3-20), and domestic judgments are valid for 7 years (§ 9-12-60). A domestic judgment can be revived up to 3 years after it become dormant (§ 9-12-61).

Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Georgia Mortgage Foreclosure

See the Bills.com resource Mortgage Foreclosure Georgia to learn more about the options available to Georgia residents, and the relevant Georgia laws.

Georgia Law & Spousal Debt

Generally, a Georgia judgment-creditor is allowed to pursue the assets of the Georgia judgment-debtor only, and not his or her spouse.

However, exceptions apply to this general rule. For example, some forms of jointly held real estate can be attached, as well as joint financial accounts. Also, if a spouse conveys the title of property to a spouse at a price that is lower than the market price, the judgment-creditor may be able to convince a Georgia court the transaction was sham intended to defraud creditors, and should be reversed.

Georgia Industrial Loan Act and Georgia Fair Business Practices Act

The Georgia Industrial Loan Act applies to consumer loans less than $3,000 with a loan length less than 36 months and 15 days. The Industrial Loan Act sets limits on interest, fees, and collections practices for short-term, sub-$3,000 loans. It does not apply to collections on other debts. The federal Fair Debt Collection Practices Act applies to other debts, and Georgia loans larger than $3,000.

See the Georgia Code Ann. § 7-3-1 to 7-3-29 and Ga. Comp. R. & Regs. § 120-1-14-.01 to 120-1-14-.25 to learn more about the Georgia Industrial Loan Act.

The Georgia Fair Business Practices Act (FBPA) mirrors the FDCPA. The FBPA prohibits any unfair or deceptive acts and practices in the conduct of consumer transactions, including debt collections. It creates a cause of action for violations of the act, and to recover actual damages, reasonable attorney's fees and costs, and three times the amount of the actual damages as punishment for an intentional violation. A FDCPA violation is a per se violation of the FBPA (O.C.G.A. § 10-1-390 and 1st Nationwide Collection Agency, Inc. v. Werner, 288 Ga. App. 457, 459, 654 S.E.2d 428, 431 (2007)).

Collection agents do not need to be licensed in Georgia.

Recommendation

Consult with a Georgia attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Georgia.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

100 Comments

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  • KC
    Apr, 2014
    Kinya
    I purchased a car over ten years ago. After four months of having the car, the transmission went out in the car. I spoke with the dealership about the issue and they didn't do anything about it. The finance was any assistance either. Therefore I told the finance company they could get the car. Yesterday I receive a letter from my job stating I have a garnishment. I never received anything about a judgement from them. What should I do?
    0 Votes

    • BA
      Apr, 2014
      Bill
      If the judgment was obtained recently, it appears that you were sued after the statute of limitations had passed. The rules to vacate a judgment vary by state, so you should speak with a Georgia lawyer ASAP. If you can't afford an attorney, see if you can get help through Georgia Legal Aid.
      0 Votes

  • JS
    Sep, 2013
    Jack
    My wife has a Judgment from a credit card company. We have been paying on every month since, last week our Joint Acct was frozen. The creditor said what we have been paying is no longer enough and now we have no money to buy food, and other necessary items. Can they actually do this my pay check was also frozen and I have child support to pay.
    0 Votes

    • BA
      Sep, 2013
      Bill
      We need to discuss several issues in your message separately:
      • Judgment: A judgment allows a judgment-creditor to ask a court to
        • Garnish the judgment-debtor's wages
        • Levy the judgment-debtor's financial accounts. Some states call this account garnishment.
        • Place a lien on the judgment-debtor's real property
        • In some states, ask the sheriff to seize the judgment-debtor's personal property, auction it, and give the proceeds to the judgment-creditor
      • Joint Account: The default rule is joint accounts are vulnerable to account levy where a judgment-debtor is one of the account owners. In some states, the other joint account owner can file an objection with the court to rebut this presumption. In general, Bills.com recommends that when a judgment is filed against a consumer who owns a joint account, the other party or parties should abandon that account and open accounts in their names alone.
      • Spouse's Wage Garnishment: It is unclear to me if you, the spouse without the judgment, had your paycheck garnished. If so, this is illegal.

      If your wages were caught up in the joint account that was levied/account garnished, then you must take two actions:

      1. Consult with a Georgia lawyer who has consumer law experience. Do so immediately. Ask the lawyer if Georgia allows you to object to the levy/garnishment of the joint account.
      2. Open a separate account in your name alone. Inform your employer's payroll department of the change, and have your pay deposited into your separate account.

      If you cannot afford a lawyer, call your county bar association and ask for the names of the organizations that provide no-cost legal services to people with low or no income in your area. Make an appointment with one of the organizations, and bring all of the documents and letters you have regarding the debt and judgment to your meeting. The lawyer you meet will advise you accordingly.

      0 Votes

    • JS
      Sep, 2013
      Jack
      So if they garnish your wages they can take only 25% but all they have to do is freeze your acct and get everything. she has been making regular payments since 2009 with no issues no calls no letter saying please pay more. then one day its no longer good enough and they get everything. That doesn't seem right.
      0 Votes

    • BA
      Sep, 2013
      Bill
      Were your wife's payments a result of a contract, written or otherwise, with the judgment-creditor? If so, then your wife has a breach of contract case against the judgment-creditor. Regardless, consult with a Georgia lawyer about this situation immediately.
      0 Votes

  • DM
    Feb, 2013
    Delena
    My husband just received a garnishment at his job, we called the attorney that held it and they stated that it was from a judgement in 2006. He never knew about that judgement, was still living in the same county and has no idea what it is on. The attorney gave us the number to court and the file# . I have tried to call and left messages but no return call. I have read your post and I'm still trying to figure out what if any limitations there can be. It would seem like to me if you have a judgement and a sheriff serves them, than they can find you to serve them to you at your home. I know they will serve them even at night. They other thing I have a problem with, the judgement had not showed up on his credit in the 6 years that we have been together. He has credit extended to him with never a question or that even showing up, why is that.
    0 Votes

    • BA
      Feb, 2013
      Bill
      Tell your spouse to consult with a lawyer who has consumer or civil litigation law experience immediately. Your spouse should not have been surprised by the judgment or garnishment. A lawyer will review the facts to learn if your spouse received an effective notice of the lawsuit. If he did not, then his lawyer will file a motion to dismiss the judgment.

      A credit report is a specialized newspaper, and is not a perfect record of anyone's entire financial life. Just because an event is not reported in the Atlanta Constitution does not mean the event never happened. The same is true for credit reports. Some counties have better relationships with the consumer credit reporting agencies than others, and it is possible your spouse's judgment never reached Experian, Equifax, or TransUnion. The fact the big-three consumer credit reporting agencies never reported the judgment is of no legal consequence.
      0 Votes

  • KS
    Feb, 2013
    Kerstin
    I dissolved a corporation and I have a collection lawyer attempting to collect on a debt against me. Can they do that?
    0 Votes

    • BA
      Feb, 2013
      Bill
      No one can answer your question without knowing more about the facts of your situation.

      If you as a corporate officer signed the loan contract on behalf of a properly formed and funded corporation that followed all of the rules for incorporation in your state, the answer to your question is, "no."

      If your corporation was not created and funded properly, or if it was just your alter-ego, or if you signed the contract where it specifically spelled-out that you as the signer had personal liability for the loan, the answer to your question is, "yes."

      Consult with a lawyer in your state who has corporations experience. He or she will analyze the facts in your case, and will advise you accordingly.
      0 Votes

  • DM
    Jan, 2013
    Don
    My son-in-law received a judgment against him for a hospital bill in Georgia. The judgment-creditor demanded Chase Bank in Georgia to deliver all funds in his bank account plus other funds totaling the judgment. Chase left him $1,300 overdrawn. This does not seem legal. Is it?
    0 Votes

    • BA
      Feb, 2013
      Bill
      I can find nothing in Georgia statutes that allows what you described. However, I did not search Georgia's case law to find a an appellate or Georgia Supreme Court case on this point. (Readers, please chime in below if you know of any cases on this issue.)

      Consult with a Georgia lawyer who has consumer law experience and ask him or her to research the account over-draw issue. Please return here and share what you learned.
      0 Votes

    • JJ
      Feb, 2014
      Jodi
      Same thing happened to me. Even after contacting the hospitals attorney to make a payment plan. They took everything out of the bank accounts, even my joint account with my minor child and froze the account. all my direct payroll deposit were also taken.
      0 Votes