Pennsylvania Collection Laws

Highlights

  • Wage garnishment is not allowed in Pennsylvania, with three exceptions.
  • The statute of limitations for most consumer debt is 4 years, but a federal court decided otherwise recently.
  • The account levy exemption amount is low -- $300.
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What are my rights and liabilities for debt collection in Pennsylvania?

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 against the debtor that affects 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.

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Pennsylvania Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

Know Your Rights - Wage Garnishment

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

There is no wage garnishment in Pennsylvania, with three exceptions. The exceptions are landlord-tenant cases, child-support cases, and federal administrative wage garnishment actions, such as delinquent federal student loans. However, bank levies, which are called bank garnishments in Pennsylvania, are permitted (see below).

Under Pennsylvania law, arrearages in child support payments may result in attachment on wages as set forth in Section 4348 - Title 23 - Domestic Relations, regulated by the Consumer Credit Protection Act. Arrearages in child support payments may also be recovered from lottery winnings as set forth in Section 4308 - Title 23 - Domestic Relations.

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. Some states call levy attachment or garnishment.

In Pennsylvania, a bank account levy is allowed under Section 9607 - Title 13 - Commercial Code, but only after judgment is awarded. Pennsylvania has a $300 statutory exemption for account levy (42 Pa. C.S.A. Section 8123). Marital assets are exempt, and banks must notify the creditor of recurring electronic deposits, such as payroll, Social Security benefits, disability payments, and so on, that might be exempt if the account contains less than $10,000. All garnishments and levies in Pennsylvania must be served by the sheriff.

If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

Pennsylvania Lien

A lien is an encumbrance, a claim, against a debtor that affects the debtor’s 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 refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance, after satisfying any liens that are in line ahead of one associated with the debt, such as any mortgages on the property. 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.

Under Pennsylvania law, Section 5107 - Title 12 - Commerce And Trade, "If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, subject to the limitations of sections 5108 and 5109, may levy execution on the asset transferred or its proceeds. Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to: (1) a lien on or a right to retain any interest in the asset transferred.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Pennsylvania Statute of Limitations

Each state has its own statute of limitations on judgments. Under Pennsylvania law, the following statute of limitations apply:

For credit card and other forms of consumer debt, most Pennsylvania judges apply a 4 year statute of limitations. In 2012, however, a Pennsylvania federal court created a two-step analysis in determining which statute of limitations applies in cases where the lender is headquartered outside Pennsylvania and has a statute of limitations shorter than Pennsylvania's. The court looked at the choice of law provision in the contract (a credit card agreement) and then looked at the place where payments were to be sent. The court found the failure of the creditor to receive the payment in its state was the injury, triggering that state's statute of limitations (Hamid v. Stock & Grimes, LLP, PICS Case No. 12-1179 [E.D. Pa. June 12, 2012] applying the Pennsylvania Uniform Statute of Limitations on Foreign Claims Act, [42 Pa. Cons. Stat. Section 5521b]).

Know Your Rights - Collection Agents
Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Pennsylvania Foreclosure

Pennsylvania foreclosure laws can be found in conjunction with the various types of real property such as Planned Communities, Condominiums, and Co-ops. To learn more about the rules surrounding foreclosure in this state, including deficiency balances please refer to Title 68 - Real and Personal Property. Pennsylvania has a deficiency judgment rule as described in Section 8103 - Title 42 - Judiciary And Judicial Procedure. A lender can sue for deficiency within six months after the foreclosure.

Recommendation

Consult with a Pennsylvania state attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Pennsylvania. If you cannot afford an attorney, you can navigate the process yourself by taking advantage of the Pennsylvania court’s self-help resources — for example, you can find general information in the FAQ section, while many of the forms you will need are available for download at the Pennsylvania Unified Judicial System forms page. Again, you should find an attorney if possible, but if you cannot, the resources listed should prove helpful.

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92 Comments

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  • LC
    May, 2019
    Linda

    I live in PA. I had a default judgement placed on 7/24/12 . Yesterday, my bank account had a levy placed . What are my options?

    0 Votes

    • 35x35
      May, 2019
      Daniel

      I am not quite sure what you are asking, Linda, but will do my best to answer.

      PA doesn't allow wage garnishment for most debts, but it does allow a bank levy. My understanding is that any amount in your account over $300 can be taken in the bank levy. I am not aware of what you can do to stop it, once it has reached this point. 

      If the default judgment came from a debt you did not owe, for which you were mistakenly being held responsible, you would need to go to court to contest it. That would be best done with a lawyer.

      If it is your debt, the best action is to keep money out of your account, as they can come back and levy your account again, if you still owe them after they take what is in your account this time.

      0 Votes

  • JM
    Aug, 2018
    JALYNE

    I have a question, I was the one that filed a lawsuit against my former employer for not paying me my wages. I won at the magistrate and and judge order him to pay. He has not paid. And I have already filed a Lien. I am now looking to do a writ of execution. My question is, what can I look to go after during that since the business is an LLC. The amount isnt that high, around $550. So it is not worth it to get an attorney. Just wanted to see what I can go after.

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    • 35x35
      Aug, 2018
      Daniel

      I understand that the dollar amount makes consulting with an attorney not cost-effective, however a local lawyer is the expert source you need for a definitive answer. I am not an attorney, so I can't give legal advice.

      I do believe that pursuing the Writ of Execution is the right step. You used to be paid by this business, I assume, so know the bank that is used for the payroll. A bank levy seems a viable strategy, as only $300 is protected from attachment in a bank account in PA.

      0 Votes

  • JM
    Apr, 2018
    John

    I have a quick question, I'm starting to get letters from attorneys requesting payments for creditors. I do live in PA. I, of course, am unable to pay or even settle these debts. If my checking account were a joint account with another that wasn't a joint account on said debt. If it would come to it, would they still be able to garnish my wages? Until I came here I didn't think they had the ability to do such a thing.

    0 Votes

    • 35x35
      Apr, 2018
      Daniel

      A creditor can't come after a debtor's wages, bank accounts, or assets until a lawsuit has been filed and a judgment issued against the debtor. At that point, the ability of the judgment-creditor to collect is governed by the collection laws of the state in which the judgment is granted, if the judgment-debtor lives in that state.

      In Pennsylvania, the good news is that wages are fully protected from standard judgment-creditors who are trying to collect a debt (wages can be garnished, even in PA, for child support or alimony). 

      Bank accounts are vulnerable to a bank levy. Only $300 in a bank account on which the judgment-debtor is listed is protected. If you have a judgment entered against you, it is prudent to make sure that you are not listed as an account holder on any account, solely or jointly with another, in which more than $300 is in the account.

      0 Votes

      • JM
        Apr, 2018
        John

        Thanks for the reply Daniel. So then with me living in PA if a standard judgment is issued, i.e., from attorneys representing collection companies who originally represented Credit Card Companies), my bank accounts and wages cannot be garnished? The debt trying to be collected is neither child support nor alimony.

        0 Votes

        • 35x35
          Apr, 2018
          Daniel

          I need to be clear that I can't give legal advice, as only an attorney can properly do so.

          My opinion is that your wages are safe from garnishment in PA (though a person working in PA whose payroll office is in another state could see wages garnished), but your bank account is highly vulnerable, post-judgment. Only the first $300 is exempt from a bank levy for any account on which you are listed, whether or not you are the primary account-holder.

          0 Votes

  • DK
    Apr, 2018
    Denise

    A friend called me very upset saying Capital One placed a Judgement on her daughter's checking account for $5,000 due to an unpaid charge card bill from back in year 2008. This is in the state of PA. She had NO warning whatsoever. This was ten years old and this has NOTHING to do with her daughter. First of all, is this not over the statute of limitations? Secondly, can they do this to her daughter? Lastly, does she have any rights at all due to the fact she had no notification?

    0 Votes

    • 35x35
      Apr, 2018
      Daniel

      I can't give legal advice, as only an attorney can do so. I will share my opinion with you as long as you understand that it is not legal advice.

      A creditor can only come after a bank account after a judgment has been obtained. If a judgment is obtained, then the creditor has 20 years to collect on it in Pennsylvania, though it needs to renew the judgment every five years. Not renewing doesn't invalidate the judgment, but can cause the creditor to lose its place in line for a collection against a debtor.

      If the debt is not the daughter's responsibility and the judgment isn't against her, then the only risk for her bank account should be if she shares the account with the actual judgment-debtor. That would expose the bank account to a bank levy.

      You didn't specify in your question anything from which I can infer the mom is or isn't on the account. If she is not, then the daughter should speak to the bank and ask how her account could be levied when she is not liable for the debt in question.

      0 Votes

  • JR
    Oct, 2017
    Jen

    My husband has or had a judgement for 5k against him from lvnv funding. We are in Pa. The judgement has passed the SOL, and they did not properly renew or revive, but managed to levy our joint checking account. Is this grounds to sue for damages? We saw an attorney and he told our bank to unfreeze the account immediately because they were improper to freeze it since it was a joint account. The bank consulted their attorney and unfroze it. We were pleased with the outcome and didn't bother to proceed with any action at the time since we did not know the action was probably illegal. We did suffer damages with outstanding checks and reversed payments and I would like to be compensated for that if we could press the issue. Thank you for any respnses

    0 Votes

    • 35x35
      Oct, 2017
      Daniel

      By all means, if you were harmed by an improper bank levy, consult with an attorney to see if a lawsuit is merited. You should be able to find an attorney that will not charge you any fees, but take a percentage of any money collected as a result of the suit. The willingness of a lawyer to work on such a contingency fee indicates confidence in the likelihood of success.

      0 Votes

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