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Advice on Judgment Garnishment

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

What will happen when a judgment has been filed against you at the courthouse for debts that you owe?

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Bill's Answer
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judgment filed against you
Highlights

  • Review the ways a creditor can collect on a debt after receiving a judgment.
  • Understand that how much a creditor can garnish varies from state to state.
  • Consult with an attorney, to find out how a judgment will affect you.

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

259 Comments

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  • MF
    Feb, 2014
    Mary
    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.
    0 Votes

    • BA
      Feb, 2014
      Bill
      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.

      0 Votes

    • MF
      Feb, 2014
      Mary
      Thanks, Bill!
      0 Votes

  • CB
    Jan, 2014
    Candice
    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?
    0 Votes

    • BA
      Jan, 2014
      Bill
      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.
      0 Votes

  • NP
    Nov, 2013
    Needing Guidanc...
    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
    0 Votes

    • BA
      Nov, 2013
      Bill
      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.
      0 Votes

  • JW
    Sep, 2013
    john
    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?
    0 Votes

    • BA
      Sep, 2013
      Bill
      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.
      0 Votes

  • AM
    Jun, 2013
    ana
    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?
    0 Votes

    • BA
      Jun, 2013
      Bill
      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.
      0 Votes