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MAY 20, 2013

Kansas Collection Laws

I owe money to a creditor in Kansas. What can the creditor do to try to collect the account from me?

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Bill's Answer: Answered by Mark Cappel

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. 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.

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.

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.

Recommendation

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

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

Best,

Bill

Bills.com

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Comments (28)


Megan B.
Osawatomie, KS  |  May 20, 2013
My husband had a street bike repoed back before we were married. It has been about 4 years since he last made a payment and he let them come get the bike. I got a call from a collection agency. They asked for me using my maiden name and I never said I was his wife. They told me everything about the debt and asked me for a credit card to put the debt on. They told me how much he had left on his credit card, and they told me if I gave them a post dated check or bank account number that day, they wouldn't sue us. They never asked who I was, they just assumed. I asked them for something in writing and they said no but they could e-mail me how much he owed. Don't they have to send us something in the mail? Can they give me all that information without knowing who I am? If they won't send us anything in the mail, how can we take it to our lawyer?
Bills.com
May 20, 2013
Under the Fair Debt Collection Practices Act, a collection agent is not allowed to disclose any facts about a consumer's debt to a third party. § 805 (d) carves out an exception for spouses and parents of minor children who are in debt. Here, you are, in fact, a spouse of the debtor, so even though you did not identify yourself as such, your spouse has no cause of action (legal reason to sue) under § 805.

As you pointed out, the collection agent made a huge assumption when it started blabbing about the collection account. In this case, however, it lucked out when you did not turn out to be a baby sitter, house cleaner, or friend who happened to pick up the telephone.

A collection agent must, under § 809, give the consumer a written notice containing the following five pieces of information:
  1. "the amount of the debt
  2. the name of the creditor to whom the debt is owed
  3. a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector
  4. "a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
  5. "a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor." [15 USC 1692g]

Consult with a lawyer in your state who has consumer law experience or, even better, experience litigating FDCPA violations. He or she will advise you if the collection agent's failure to follow § 809 gives you a legal reason to file a lawsuit against the collection agent.

Amy R.
Arkansas City, KS  |  March 28, 2013
My husband currently pays $400 a month through the state for child support which is about 40% of his disposable income. He just got sued for his ex wifes medical debt from when they were separated. They refused us anything less than $200 a month or us paying the total. Can they garnish anymore of his wages? And his name isn't on anything not on the house or our 2 vehicles, or my checking account. So can they come after these things? We are in the process of filing for bankruptcy simply because including this debt we have made over 12000 in medical debt but we need to wait 2 months for personal reasons.
Bills.com
March 28, 2013
You answered your first question in the first sentence of your comment. Kansas follows federal limits for wage garnishment. The maximum a judgment-creditor may garnish is 25% of disposable income. Here, you mentioned your spouse is already paying 40% of his disposable income for child support. (Exceeding the federal 25% limit is allowed for child support.) Any other creditors who have the legal claim to garnish your spouse's wages will need to wait in line until the child support garnishment order expires.

You asked about any liability you may have for your spouse's debts. You asked this question on a Kansas-related page, so I will assume you reside in Kansas. Kansas is a common law state when it comes to family law. It is not a community property state. Therefore, spouses generally do not have liability for each other's separate debts. You mentioned your vehicles and house are not in your spouse's name. If so, then your spouse's creditors will have no claim to those properties.

You mentioned filing bankruptcy. Consult with a lawyer in your state who has bankruptcy experience. Most lawyer-filed bankruptcy cases succeed. By contrast, most self-filed bankruptcy cases fail. Be sure to raise your questions here to your bankruptcy lawyer because my answers are based on a very tiny window into your circumstances.
Chelsey S.
Pittsburg, KS  |  February 29, 2012
Back in 2007, I was charged a fee for using a debit card which took me into the negative, and before I knew it I was negative over $200 not because of my own spending, but because of the fee. I refused to pay because I had not spent any money that would have taken me into the negative. The bank passed my account over to an attorney who I have not had any contact with since 2008 and now out of nowhere I received an order to appear to answer questions about income, assets etc. Upon recieving this notice I got on the court website and noticed that when i was employed the past 9 months my wages had been garnished without any notification. My question is, was the garnishment legal without my being notified? Also, why has this attorney gone almost 4 years without contacting me, and how do I get this to stop?
Bills.com
March 01, 2012
Apparently, a judgment was entered against you, likely a default judgment. Your not receiving notice did not stop the judge from issuing the garnishment. Perhaps the creditor made a reasonable effort to notify you? Maybe the attorney waited, for any of a variety of reasons, but decided to sue you due to the debt nearing the statute of limitations. Post-judgment, it is hard to get a garnishment stopped. Hopefully, you will have the debt paid off soon and put the matter behind you.
Jessyca C.
Olathe, KS  |  January 30, 2012
Are payday loan companies or any other companies that are required to do collections allowed to come to their clients job to attempt to collect debts. This goes for a store in the state of KS collections will be done in both KS and MO
Bills.com
January 31, 2012
I know of no state that prohibits in-person collection of debt. However, this is a rare occurrence for several reasons, including the high cost of person-to-person collections, and the risk of persistent collectors being arrested for trespassing. Consult with a lawyer who has consumer law experience in your state to learn the precise rules that govern the practice of debt collection in your state.
A A.
Junction City, KS  |  January 06, 2012
With no disrespect to Bill who is clearly educated on the subject, I just wanted to clear up the misinformation about open-ended accounts. The statute of limitations is 3 years.
Bills.com
January 06, 2012
Thank you for your message. We updated the page above with this information and corrected the link the relevant Kansas statute.

This is a good opportunity to remind readers that Bills.com makes reasonable efforts to publish accurate information, but we make mistakes. The information here is intended to help people understand their rights and liabilities, and it is not intended to replace consultation with a lawyer.
Dawn R.
Elko, NV  |  September 27, 2011
In the summer of 2005, I was 18 but still under my mother's health insurance and living in her home as a full-time student. I went to the hospital twice in a couple of weeks due to two separate injuries. I do not remember signing anything and I wouldn't say that I didn't, but because the insurance was under her name I can't imagine that I did. Anyhow, I lived in Kansas until I was 21, almost 22 (which means I was there for 3 years) and I had not received any communications about the debt they now say I owe. It has now been 6 years since the debt was incurred and I received a notice stating I had an obligation to dispute, pay, or set up payment arrangements within 30 days. I read Kansas has a statute of limitations of 5 years, but I also read that there's a claus for out-of-state defenders. I never took steps to "conceal" my address or escape legal action - I have had credit in my name where I used current addresses for the past 3 or 4 years. My question is - do you think the statute of limitations still applies to me since I was in Kansas for 3 years without being given notice of this debt, or do I still need to worry about facing legal action?
Bills.com
September 27, 2011
Statute of limitations questions are tricky. You bring up one potential issue, tolling. Tolling is when the running clock on the statute of limitations is stopped, giving the creditor additional time to collect on the debt because it was prevented from reasonably pursuing collections due to an action that the debtor has taken or due to some factor affecting the debtor. For example, some states allow a statute of limitations to be tolled if the debtor resides outside of the state in which the contract's laws apply.

Your best course of action is to speak with an attorney who can review the SOL and tolling issues with you.
Erick E.
Oklahoma City, OK  |  September 13, 2011
i had a car wreck a year ago with a lady who was uninsured, i sued her in small claims and received a judgement- since then she has moved to wichita kansas. could i still garnish her wages or is there a better course of action to collect?
Bills.com
September 13, 2011
An out-of-state judgment must be domesticated in the defendant's state before the judgment-creditor can use the judgment-debtor's state remedies laws to collect on the debt. In other words, the judgment-creditor must hire a law firm licensed in the judgment-debtor's state and file a motion in a local court to make the judgment enforceable in the judgment-debtor's state of residence. Certain creditors, such as the IRS, state tax authorities, the Dept. of Education, and state collectors for delinquent child support do not need to domesticate a judgment.

One option is to sell the judgment to a collection agent.
Geneva Y.
Salina, KS  |  September 06, 2011
An eldery family member loaned her son money. A mortgage deed is filed at the local reg of deeds. She has Alzheimer's this loan was never paid. Her short term memory is quite effected however in her long term memory she wants this loan paid to her for her care. We can not find any paper work on this transaction in her files. The son has only produced a copy of the Mortgage Deed. It was to be paid by Jan 2008. What Kansas statutes effect recovering this loan plus interest?
Bills.com
September 07, 2011
Geneva, your friend needs to seek legal advice from an attorney.
Mary W.
Park City, KS  |  April 26, 2011
Can a creditor that has been awarded a judgement in Kansas garnish your wages and bank account at the same time?
Bills.com
April 26, 2011
A judgment-creditor may ask the court for an account levy and a wage garnishment in states allowing wage garnishment.
Garrett M.
Bel Aire, KS  |  April 04, 2011
My wife had a judgement in 2002 that she was not aware of and has not been paid. This has not shown on her credit in the past 3 years and the first that we heard of it was a few weeks ago. Since we are in Kansas, the statute of limitations on judgements is 5 years or set to expire in approx 2007. Does the collection agency still have the option to renew even though 4 years has passed since the expiration of the judgement?
Bills.com
April 04, 2011
See Kansas 60-2403, which says in part "if a renewal affidavit is not filed (...) within five years from the date of the entry of any judgment in any court of record in this state, (...) the judgment, including court costs and fees therein shall become dormant, and shall cease to operate as a lien on the real estate of the judgment debtor. When a judgment becomes and remains dormant for a period of two years, it shall be the duty of the judge to release the judgment of record when requested to do so."

As I read 60-2403, the answer to your question is no. However, I am not a Kansas lawyer, and therefore am incompetent to answer your questions about Kansas law. Therefore, consult with a Kansas lawyer who has experience in civil litigation. He or she will interview you to learn more about the facts of your case, can ask probing questions, and will apply Kansas law accordingly.
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