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.
Utah 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 a debtor's wages, with the percentage allowed being determined by each state.
Wage garnishment is allowed under Utah Rule of Civil Procedure 64D and federal law 15 U.S.C. 1673(a). If the judgment-creditor is aware of the debtor’s place of employment, it may seek wage garnishment. Under federal law, the garnishment applies to 25% of the debtor’s net take home pay, (i.e. gross pay less statutorily mandated deductions). Garnishment can occur only after the person being garnished has received a 10-day’s notice.
Under Utah law the maximum amount of employee’s earnings that may be garnished for a consumer debt is 25%, or the federal minimum hourly wage times 30 times the number of weeks in the pay period. For child support the amount is greater. In Utah, the maximum amount garnished for child support is 50%, or the federal minimum hourly wage times 30 times the number of weeks in the pay period.
If you reside in another state, see the Bills.com Wage Garnishment article to learn more.
Utah Bank Account Levy
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 Utah, levy is called a writ of garnishment and is allowed under Utah Code Rule of Civil Procedure 64D. General exemptions for bankruptcy, garnishment, attachment, and execution can be found in 78B-5-505, 78B-5-506, and 78B-5-508.
Lien in Utah
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.
Utah allows judgment-creditors to place a lien on property, as per Utah Code Section 78B-5-201 and Utah Code Section 78B-5-202.
If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.
Utah Writ of Execution
A Writ of Execution may be used to seize the judgment-debtor's non-exempt real property or personal property in the debtor's possession. See Rule of Civil Procedure 64E.
Utah Writ of Replevin
A Writ of Replevin may be used to recover a particular piece of personal property in the defendant's possession. A Writ of Replevin is permitted only in narrow circumstances following special procedures. See Rule of Civil Procedure 64B.
Statute of Limitations In Utah
Each state has its own statutes of limitations. The statute of limitations for a credit card (called an open account) is 4 years (Utah 78B-2-307-1b), a spoken contract is 4 years (Utah Title 78B-2-307-1a), a written contract is 6 years (Utah Title 78B-2-309), and either a state or federal judgment is 8 years (Utah Title 78B-2-311).
Consult with an Utah attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Utah.
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