Advice on Judgment Garnishment

What will happen when judgment has been filed against you at the courthouse?

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judgment filed against you
Bill's Answer: Bills.com Resident Expert

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. I will explain the details in just a moment.

Wage Garnishment

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 to deduct a certain portion of your wages each pay period and send the money to the creditor.

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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.

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The US Dept. of Labor offers several resources explaining wage  garnishment rules in general, and Title III, Consumer Credit Protection Act (CCPA), specifically.

Levy a Bank Account

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.

Lien

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 the Bills.com State Consumer Protection Laws and Exemptions page.

If you have a judgment against you, consult with an attorney licensed in your state to learn how the judgment will affect you, based on your individual financial circumstances.

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

Best,

Bill

Bills.com

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Comments (259)


Mary F.
Lafayette, IN  |  February 04, 2014
A credit card company received a judgement against me for a debt I could no longer meet after I became disabled. I realize that SSDI cannot be garnished for credit card debt but what about private long term disability insurance payments? Court records show an order of garnishment was sent to my former employer where my LTD payments originate but I am no longer employed by them. Indiana law is unclear in that it says social security and "most" disability pensions/payments may not be garnished.
Bills.com
February 05, 2014
Take these two steps:
  1. Read Indiana Code section 24-4.5-5-105 (1) (a), which defines what Indiana courts allow judgment-creditors to garnish. My interpretation of the plain language in the statute tells me the Indiana legislature intended courts to allow garnishment of wages, and not insurance benefits.
  2. Consult with an Indiana lawyer who has consumer law experience to learn if my interpretation is collect.

If you cannot afford a lawyer, contact Indiana Legal Services or another Indiana pro bono program for no-cost legal assistance.

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Mary F.
Lafayette, IN  |  February 05, 2014
Thanks, Bill!
Candice B.
League City, TX  |  January 25, 2014
I received a writ of judgment. The amount in question is $3,000 but the bank froze the entire $20,000 in the account. Why is that?
Bills.com
January 25, 2014
Bank levy laws vary from state to state. Consult with a lawyer in your state who has consumer law experience to learn how you can respond to the levy. You may, again depending on your state law, be able to file an emergency motion to un-freeze the account.
Needing Guidance P.
Springfield Twp, OH  |  November 07, 2013
IF a family member loaned me 1K in Ga in May 1998 and is now coming back to me stating they will go to small claims court to recoup the funds do they have a valid case? I now live in Ohio
Bills.com
November 07, 2013
If the lender can provide admissible evidence he or she gave you $1,000 with the expectation you would repay him or her, in other words a contract or evidence of a verbal contract, then yes, the lender can file a lawsuit against you.

You almost certainly have a statute of limitations defense available to you. Consult with an Ohio lawyer should the lender file an action against you in Ohio, or a Georgia lawyer should the lender file an action in Georgia.
John W.
Atlanta, GA  |  September 13, 2013
In Ga., which is a 25% of disposable income state, and my disposable income is 27,000 annually (thus,@ 25%, 7,750 available income) AND I am satisfying three credit card debts--2 by agreed and filed judgements-- for $500 a month or 6,000 per annum, can I be held liable for more than the 1,750 difference? In other words, I make 27,000 after legal deductions, $7,750 is available for judgements. I'm already paying 6,000. Can I be held liable for more than the 1750 difference? Is 25% the maximum total for all such debts?
Bills.com
September 13, 2013
Read Georgia O.C.G.A. § 18-4-20. The statute, as I read it, does not include a deduction or exclusion for existing debt payments when calculating the consumer's disposable income. The best legal opinion you can get is from a Georgia lawyer, which I am not, who can review Georgia's case law on this matter.
Ana M.
Lake Elsinore, CA  |  June 20, 2013
HOA levied my account and withdrew money two day ago. It also put a hold on my safe-deposit box too. At what point they can empty the contents?
Bills.com
June 21, 2013
You indicated you reside in California. There is no set time for doing so in California. The judgment-creditor will schedule a time with your local sheriff for opening your safe deposit box. Your bank will notify you so that you can attend and produce a key to open the box. If you do not attend or lost the key, the sheriff will call a locksmith who will either pick or drill-out the lock. You may be liable for this cost, so your best course of action is to attend the box opening.
Seth M.
Anacoco, LA  |  June 29, 2011
if you are trying to make a payment arrangement on way behind bills, can credit card companys still try to garnish your wages?
Bills.com
June 29, 2011
A creditor cannot garnish your wages only because you are behind on your bills. In order to garnish your wages, a creditor needs a judgment from a court, which it can't obtain unless it sues you and wins. Keep trying to work out a solution with your creditor before a lawsuit is filed.

Bankruptcy, while a solution of last resort, stops a garnishment, even one already in place, from the time your bankruptcy petition is filed until it discharges.
Bob N.
Truckee, CA  |  June 18, 2011
I paid off the judgment 2 months ago. The Sheriff Dept. is still garnishing my checks and levying my bank account I'm in California. How long does it take to lift the garnisments and levy ??
Bills.com
June 20, 2011
The employer should cease the garnishment when the amount specified in the judgment is satisfied. If you settled the debt independently from the garnishment, the employer is unaware of this fact. Consult with a lawyer in your state who has consumer law experience, and ask him or her to file a motion to cease the garnishment.
Steven R.
Cape Coral, FL  |  June 12, 2011
I have 3 judgements for criminal traffic violations from 2008. It stated that 6 to 8 percent interest will be added each year until paid to clerk of courts. Never recieved paper work about payment plan. My question is there a statute of limitation for this??? Can I settle this for less??? They haven't garnished my wages yet so I doubt they will. I already paid over three thousand to get my license back. Should I just drain the rest of my savings to pay it or try to get it reduced. I understand I made a mistake and should pay it, but I have over 400 in interest alone by now. I never recieved a bill, how can they charge me interest? Any advice appreciated.
Bills.com
June 13, 2011
I am not aware of any statute of limitations that applies to this kind of government debt.

I don't believe you will be able to negotiate a settlement for this kind of debt.

I am hesitant to advise you to drain your savings to pay off the debt. It may make sense to pay off the debt faster than you are, but it is not a good idea to completely drain your savings. Emergencies arise and it is important to have a 'rainy-day fund.' You have to weigh the cost of the interest against the cost of using all your savings.

Lastly, the reason that you are being charged interest is likely due to the way the law reads in your state, which sets a specific interest rate for a debt like yours.
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Tuesday F.
Asheville, NC  |  June 17, 2011
Hi there, I judgment has been made against me on a credit card that I had to let go into default to save money for a medical procedure. I was able to speak to an attorney at a local organization that gives free legal assistance when I was served the papers telling me the credit card company was looking to get a judgment against me. (I talked to them to understand what the papers meant) They told me to call them back if I got papers telling me a judgment has been made because I would have 30 days to file something to protect up to $5,000 in my bank account and up to $5,000 of my non-financial assets (my vehicle is worth much less than $5,000 but I definitely need to protect it) I've been playing phone tag with them, but last time it took just about 30 days for me to speak with someone so I figured I'd be safe and look for more advising in case they are unable to come through for me in time. Basically I need to know what papers to file here in NC to keep them from being able to take money (under $5,000) from my bank account and where to find these papers and where to file them. Any help you could give me would be (truly) a lifesaver.
Bills.com
June 17, 2011
In some states, like California, the state courts have forms for almost everything. In most of the other states, however, there are few standardized forms. Follow the advice of the attorney you met and make another appointment with him or her and get help in completing the pleading, form or whatever North Carolina courts call the exemptions you need to file.
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Risi H.
Shelton, WA  |  June 24, 2011
My husband recently was served with a writ of garnishment to his Former employer! Does this mean he's dodged the bullet for now?? We plan on paying in full but not until oct. Any advice will help! Thanks
Bills.com
June 24, 2011
Yes, he has dodged a bullet, however if the judgment creditor tracks down where he is currently working, he could have his wages garnished there. Any bank account with his name on it is at risk now.

He could try to play "duck and cover," hoping that nothing bad happens between now and when he can pay in full in October. He could approach the creditor and try to work out a payment plan. Both strategies have risks. Duck and cover only works if the creditor does not locate his new place of employment. Speaking with them to work out a payment plan could lead to a problem if they press him on where he works, in order to garnish him there. It is also only a viable solution if a payment plan can be offered that meets the creditors needs and your budget.
Andrea O.
Middleton, WI  |  June 02, 2011
I received a notice that I have an unpaid medical bill from 1997 from the hospital. I was not aware of a bill nor did I ever pay anything towards it. The notice also stated that there was a small claims court judgment from 1997 stating that I owed the hospital, which I was able to verify. I was also not aware of the judgement. As far as I know, the statute of limitations for judgments in Wisconsin is 20 years. Is there anything I can do besides pay the bill? Also, upon calling, they claim that this will go on my credit score. Since I have never paid the bill, shouldn't the 7.5 years of default be passed so it can't go on the credit report or does paying now mean that it resets the clock? Thanks!
Bills.com
June 03, 2011
Consult with a Wisconsin lawyer who has civil litigation experience. You should not have been surprised by the judgment — one pillar upon which the civil court system stands is that both parties to a lawsuit must receive adequate notice of a lawsuit and all communications regarding a lawsuit. You were surprised by the lawsuit and judgment, which tells me the plaintiff did not give you adequate notice of the lawsuit. The first thing to investigate is whether the results of the trial or hearing can be vacated. Second, in some states, the defendant must be given notice of a judgment. Here again, you were surprised by the notice, which tells me that the plaintiff or the court did not give you adequate notice of the judgment (if either is required to do so under Wisconsin law).

As mentioned, consult with with a lawyer to learn if the judgment is ripe for attack.
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Yvonne C.
Discovery Bay, CA  |  June 08, 2011
My husband received a judgement in '05 (it was filed in the state of NY); he never received notification and was unaware of it until a year later when he ran his credit report. By the time he was aware of it, he had already moved to CA (which could be why he never received the lawsuit documentation in the first place) and in '08 received a letter from an attorney mentioning the account had been referred to their "special investigation unit" to locate any assets he has. He is a struggling artist and I am the main provider for our family, and we live paycheck to paycheck. It has always been our intent to pay his judgement once his career took off, however that has yet to happen... now I am unemployed and he has been presented with an opportunity to work on a project, but because of my being unemployed we are in desperate need of every cent of what he can earn from it. My question is twofold: 1) Can they try to garnish his wages OR levy his bank account if it is a NY judgement and he now resides in CA? 2) He plans on forming a CA corporation (not sure yet if LLC or S-Corp) with a bank account tied to it; would they be able to levy this business account? We also have considered forming the corporation as a partnership, would this make any difference in their right to levy the account with me being tied to it OR any other family member for that matter? Thank you so much for your time. I have read a lot of your responses to questions on this site, and I must say, your company is "on it" in terms of providing sound advice and at an amazing response rate and turn around! By far this site is one of the best I've seen for credit/debt management Q&A.
Bills.com
June 09, 2011
My first and last thoughts will be to recommend you consult with a California lawyer.
  1. A non-California judgment-creditor has the right to domesticate a sister-state judgment in California. See the link I just mentioned for more information.
  2. You mentioned an interest in forming a corporation. A properly funded and created corporation following all of California's statutes is insulated from its stockholder's liabilities, and vice-versa. This is true for LLCs, S, and traditional corporations. However, if a corporate officer opens a bank or credit union account and uses his or her Social Security number as the tax identification number, that account may be ripe for judgment-garnishment for that officer's personal debts.
  3. The rules for partnership liability are different from corporate liability. A corporation is a legal entity — a person. A partnership is not a distinct legal entity, and as such the business liabilities for one partner are borne by all of the partners equally.

This is a very abbreviated discussion of corporations and partnerships, and lacks nuance. First, buy one of Nolo Press' excellent guides to forming a business. In particular, Choose the Best Legal Entity for a One-Person Business is a good choice. Second, consult with a lawyer who has experience in forming business organizations.

Ronnie R.
Houston, TX  |  May 31, 2011
I am getting letters for attorney's about a law suit file against me in my county (in Texas); I travel a ton for work so I'm just going through months worth of mail. Other than these attorney letters claiming to help I have no other letters, etc. from the county talking about a lawsuit/judgment. How can I tell if these are scare tactics or if something has actually been filed... i want to resolve this as soon as possible but when i call the card company they say it can no longer be handled by them and I am referred to the firm that my debt was handed over to but I have no correspondence from them??? Help.
Bills.com
June 01, 2011
It could be scare tactics or it could be a legitimate attempt to collect on a debt. Do you feel you owe someone money and have not paid on the debt for a long enough time that you could have been sued? Was someone contacting you to try and collect on the debt and you ignored it?

Pull your credit report and view the 'public records' area to see if there is a judgment against you. Look and see who is the creditor and contact them if you owe them money. Consult with an attorney to discuss the statute of limitations. Keep in mind that if you live in Texas, your wages are protected from a garnishment by an unsecured creditor. This gives you more leverage to negotiate a settlement, if you do owe the money.
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