Bills.com > Manage Debt > Deal with Debt > Debt Relief Q&A > Utah Collection Laws
Question:
MAY 25, 2012

Utah Collection Laws

What are the common guidelines for outstanding debt in Utah?

Read full question
Bill's Answer: Bills.com Resident Expert

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.

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under Utah or federal law. Garnishment may be allowed for child support.

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 Advice on Judgment Garnishment to learn more about wage garnishment.

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.

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).

Recommendation

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

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

Best,

Bill

Bills.com

Comments (41)


H C.
Naples, UT  |  May 25, 2012
I recieved a summons today on a medical bill from 2/09 that I thought had been paid off. The balance due was only about $100.00. The first problem I encountered was that they are asking for the FULL amount plus attorney fees on the summons. I called and spoke with the attorneys office to ask why they didnt have the payments credited to the account/why they were asking for the total due. She fumbled around for a minute and then told me yes, I HAD paid $250 on the account which left a balance of less than $100, but with the attorney fees of $250 everything owed came up to 371.00. I asked if I could settle for 200.00 and she said no. She asked when I could pay it IN FULL and I told her I couldnt, that I would need to make payments of $50 per month. She told me they could not hold the judgement against me, even if I was making payments. First of all, isnt there something I can do about them trying to collect the FULL amount (they have it as 589.00 ) (when it is only truly $371 with attorney fees) with the money credited that I already paid? Sounds like fraudulent practice to me. If I wasnt paying attention, they could get that judgement in full with out my payments I made!
Bills.com
May 25, 2012
First, see the Bills.com article How to Answer a Summons & Complaint to learn what your next step should be if you cannot reach an out-of-court settlement with the law firm that filed the action.

Second, check to see if this action was filed in your state's small claims court. If so, look on your state court or bar associations' Web sites to learn the exact steps you need to follow when answering the complaint. Then, appear for your hearing and argue your case to the court.

Finally, the table is tilted in the favor of the plaintiff here because he, she, or it employed a law firm to handle the case. Consider tipping the table back to level by consulting with your own lawyer so you have a better understanding of the strategy and tactics available to defend yourself.
Michael J.
Sandy, UT  |  May 22, 2012
What percentage of wages can the state garnish for overpayment of unemployment benefits ??
Bills.com
May 22, 2012
I don't see a strict percentage listed. Here is what I found at the Utah government site. "If you are paid benefits to which you were not entitled, an overpayment is created. An overpayment notice may accompany or follow a notice of denial and will contain repayment and appeal instructions. Benefit overpayments are established for the total weekly benefit amount before any deductions such as child support or taxes."

"Repayment of your overpayment as directed is important. Failure to do so may result in recovery of the overpayment by garnishment of your federal and/or state tax refunds, wages, checking or savings accounts or by means of a sheriff's sale of your personal property. You may request an installment agreement to repay the amount you owe."

"If the Department determines that you were not at fault in the creation of an overpayment and you meet the poverty guidelines, you may request a waiver of the non-fault overpayment."
Amy P.
Bountiful, UT  |  February 10, 2012
I am so happy to have found this site. I have a payday loan that is outstanding. Can they garnish my paycheck in the state of Utah? The loan is about $1,500. I took it out to help my brother who was in a bad situation and he still hasn't been able to help me pay it back. It was a poor choice now that I look back. Can you please advise me on my rights? Thanks so much! Amy
Bills.com
February 10, 2012
A payday lender has the same rights, and must use the same procedures to collect a debt as any other creditor in Utah. You did not mention this, but if the payday lender or its collection agent is threatening you with arrest (common for payday collectors), that is an empty threat without a basis in law. Please reread the original article above where we discuss Utah residents' rights, and in particular, the rules for wage garnishment.
Liz H.
Sunset, UT  |  January 18, 2012
my husband is currently getting garnished for child support and a judgement. The child support takes 25% and the judgement takes another 25% isn't this against the law in utah?
Bills.com
January 19, 2012
For the purpose of child support wages can be garnished up to 50% depending on the state law.Read the Bills.com article about two creditors garnishing wages at the same time. I recommend that you consult with a local attorney regarding your legal rights.
Colette H.
Taylorsville, UT  |  October 29, 2011
I am an advocate for several persons in many different situations, so at times need to ask questions on behalf of others. Utah law states that up to 25% of net can be garnished after statutorily mandated deductions. Are medical insurance deductions considered stat mandated? ie: my friends check after taxes and med insure deductions is $580 every two weeks. Collections garnishes $493-$500 per paycheck, leaving her $87.00 or less per check. Her gross is $1200 to $1300 before taxes or any deductions. She is a single parent of 3, has spoken with the collections agency, and they tell her the law allows them to take that much and they will not lower the amount they take. this is a judgment.
Bills.com
November 01, 2011
Medical insurance deductions are not mandatory deductions and are not subtracted from the gross pay to determine the garnishee's disposable income. The US Department of Labor says in Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title 3 (CCPA), "The amount of pay subject to garnishment is based on an employee's 'disposable earnings,' which is the amount left after legally required deductions are made. Examples of such deductions include federal, state, and local taxes, the employee's share of State Unemployment Insurance and Social Security. It also includes withholdings for employee retirement systems required by law. Deductions not required by law, "such as those for voluntary wage assignments, union dues, health and life insurance, contributions to charitable causes, purchases of savings bonds, retirement plan contributions (except those required by law) and payments to employers for payroll advances or purchases of merchandise..." usually may not be subtracted from gross earnings when calculating disposable earnings under the CCPA."

I agree with you that something is wrong with the numbers. Even if she were not paying any taxes or Social Security (which I strongly doubt is the case), 25% of the gross income you estimated at a maximum of $1,300 per check would be $325 per check. If the numbers you gave me are correct, your friend should immediately speak with her payroll department. The amount of the garnishment must be no more than the 25% of her disposable income for a standard judgment-creditor. Garnishments can be larger for certain debts if so ordered by a bankruptcy court, for state or federal taxes, or for child support.

I believe that your friend is entitled to get back any money that was taken beyond the legally permitted garnishment, though I can't say that definitively. I think you or she should speak to an attorney that specializes in employment law, if she does not get what she seeks speedily.
Natalie H.
North Logan, UT  |  September 24, 2011
if I went to court because of a debt collection and set up payment arrangements with the company through the court and my payment is made on time can the law office/debt collecting agency levy out my bank account...which has been done after I already made payments to them? Including they took more then 75% of what was in my account, checking and saving.
Bills.com
September 24, 2011
A creditor can't levy a bank account without a judgment against you. Did you make a written agreement with the collection agency specifying how the debt was to be paid? If the collection agency violated a written agreement, you have good grounds to contest the bank levy.

I recommend that you consult with an attorney. He or she can advise you whether the collection agency behaved improperly and what recourse you have.
Deb B.
South Jordan, UT  |  September 23, 2011
Can a collection agency continue to call and attempt to collect a debt they have already sent to court?
Bills.com
September 23, 2011
When you say "sent to court," what do you mean exactly? If you mean the creditor has filed an action against you, but the hearing has not taken place, then yes, it can continue to try to settle the case out of court. If you mean the creditor has received a judgment, then yes, it can attempt to collect the debt privately, and is not required to use the remedies in your state. These remedies may include wage garnishment, account levy, and liens, which are discussed above.
Linda C.
South Salt Lake, UT  |  September 15, 2011
I transacted a check loan with Check City in February 2011, to help a relative. I wasn't able to pay in full when due, so I asked Check City to provide payment options. They wouldn't, and only wanted amount in full. I told them I and my relative couldn't pay in full, and needed payments. No go. I received a few phone calls from Check City, and all they wanted was the entire amount. Calls stopped. Then in July 2011, a young man brought me a Small Claims Affidavit & Summons. The check loan was made in West Valley City, and the summons was for Provo. No correspondence AT ALL through this time, except summons. Now it is September 15, 2011, still nothing. Then my company mail clerk slipped and said some court papers from Check City regarding wage garnishment came. #1 No correspondence, #2 small claims case in different City and County, #3 I still haven't been notified of anything. What do you think?
Bills.com
September 16, 2011
Take charge of the situation. First, work with your relative to come up with a lump-sum settlement to pay off the debt. Second, contact your payroll department to learn directly from someone other than a mail clerk to learn if there is an garnishment in the works. Third, negotiate a lump-sum settlement with the creditor to resolve the debt.
Avatar
Justin M.
Providence, UT  |  September 19, 2011
you will have to file amotion to have the judgement set aside then supeona all there records, notes re mail sent collection notes etc the judge will generally favor the consumer were payday loans are involved and most will let you make payments but you have to defend yourself and take actions after six months it is harder to have a judgement set aside good luck
Larry V.
West Valley City, UT  |  March 28, 2011
Strange situation. Over 3 years ago I got a check from my insurance company for a fire loss on a rental property. It had a mortgage on it. Received a check in the mail that had my name on it as well as the banks name. Did not receive any instruction from insurance company or bank about how to spend or deposit money. I was not familiar with how it all worked so I signed my name and deposited check at my bank. The teller deposited it with no problem or question. Had intention to use funds on property, but again never received instruction on how/what to do. This was over 3 years ago. Now I just got a notice from the bank I deposited the funds at suing me for the amount of the check, because they were forced to return the money to the insurance company's bank because it was not endorsed properly with both signatures. They are claiming fraud because they think I knowingly tried to deceive them. This is not true as I just knew I had a check with my name on it and deposited it and never heard anything else, I had no fraudulent intent. Isn't this just the depositing banks error for not catching that it needed another endorsement? Isn't there some sort of time limit on something that occurred that long ago? What is your professional opinion on this, thoughts? Any help is greatly appreciated.
Bills.com
March 28, 2011
Consult with a Utah lawyer (or a lawyer in your state if you reside elsewhere) who has experience in civil litigation. You are correct when you state that fraud requires intent, and you and the bank have a different perspective on the definition of intent. It is a shame the bank filed a lawsuit against you without attempting to negotiate a settlement first, because that is probably how this matter will be resolved. Again, bring all of the documents to a lawyer who can review the summons and complaint in person, can ask probing questions (such as, "Did you use the money to repair the damage?") to get a more precise and useful answer.
Delphine H.
Grantsville, UT  |  March 28, 2011
My husband and I have some credit card judgements against us. Our LLC(with own name and tax ID number) owns our properties. Could we have liens placed on our home and rental property if they our not in our personal names?? I've asked lawyers, here in Utah, but they contend that the "Coporate Veil" is thin and depends on the aggressiveness of the Lawyer. Is this true?
Bills.com
March 28, 2011
The corporate veil is as thin as the corporate officers allow it to be. A corporation will insulate its shareholders and officers from liability if the corporation is:
  1. Funded adequately
  2. Operated with the formalities called for by its state's laws
  3. Set up according to your state's laws (in other words, your lawyer did his or her job correctly)
  4. Not an alter-ego of a shareholder or two

It is easy for shareholders and officers to forget to follow the formalities, including holding annual meetings, electing officers, and so on. It is easy to start treating a corporate bank account as a personal piggy-bank. It is easy to do a slap-dash job when filing the articles of incorporation. Many corporations are inadequately funded. In general, it is easy to pierce the corporate veil for small corporations because the shareholders and officers are lackadaisical about details that make a corporation a separate legal entity.

The question you must answer is, "Did the corporate officers sweat the details?" If yes, then you are fine. If no, then you have trouble.

Waiting for comments to load Loading more comments
Thanks for your feedback!
 
Articles Ask Bill
Thank you for subscribing!