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.
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.
Kansas garnishment rules are found in Kansas Chapter 60 Article 7. In Kansas law, "Garnishment is a procedure whereby the wages, money or intangible property of a person can be seized or attached pursuant to an order of garnishment issued by the court under the conditions set forth in the order." Kansas follows federal limits for garnishment (60-734). 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 Kansas or federal law (Kansas 60-2308). Garnishment of Social Security and pensions may be allowed for child support.
Generally speaking, 401(K) or other retirement funds are exempt from garnishment. It is advisable to have those funds deposited into a separate bank account to ensure financial accounting if you are concerned about garnishment on those payments.
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 Kansas, levy law is intertwined with garnishment law. Property can be attached (garnished) in Kansas under Kansas Chapter 60 Article 7. Intangible property, such as accounts receivables, can be garnished (60-732). Funds held by a financial institution can be garnished as well (60-733).
If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.
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.
Kansas laws governing liens are found in Kansas Revised Statute Chapter 58 Article 2. Liens are allowed on real property. Liens are also allowed on building materials, crops, and livestock if the plaintiff is the defendant's supplier. Liens are allowed for labor and materials. Liens are allowed for judgments under Kansas 60-2202 and become a lien on the real property of the judgment debtor.
Succinctly, liens are allowed for contractors and farm suppliers. Judgments can be enforced as a lien on the defendant's real property.
If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.
Kansas Statutes of Limitations
Statute of Limitations for Kansas are found in Chapter 60, Article 5 60-512. The statute of limits for open accounts (credit cards) and other written contracts are three years (Kansas §84-3-118), and spoken contracts are three years.
Consult with an Kansas attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Kansas.
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