Pennsylvania Collection Laws

Pennsylvania Collection Laws - Couple Dealing with Debt

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IN THIS ARTICLE:
  • 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.

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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112 Comments
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  • J
    Jay,
    Oct, 2020

    Hello, can the same creditor attach my wages and levy my personal property at the same time? Thanks.

    • 35x35
      Daniel,
      Oct, 2020

      Jay, I am not a lawyer, so my answer is not to be taken as legal advice.

      A judgment creditor is not restricted to one method of collecting on a debt. As long as the debts are collected consistent with the laws of the state, you could have a bank account levied, wages garnished, non-exempt property seized, and a lien filed against you that encumbers property you own.

      Are your wages are being garnished? You asked your question on our Pennsylvania Collection Laws page and wages are protected from garnishment in the Keystone State, for most types of debt.

  • C
    Cindy Castillo,
    Jun, 2020

    Received Answer to Interrogatories from credit union bank garnishment against the debtor. I am the creditor- lender. Bank answered and the amount that was "frozen" is much less than judgment owed me. Her paycheck is direct deposit biweekly. 1. Have been told I must file a "form" with Prothonotary office regarding the bank garnishment as reported in bank interrogatory answers. What do I need to file? Because the amount does not satisfy judgment, can bank continue to freeze any and all future deposits until judgment satisfied? Or, must I continue filing the Writ of Execution every 2 weeks to continue the freeze on future direct deposits? The judgment is filed in one county, bank location in another county. Does this effect the bank garnishment? I completed all legal proceedings pro se. It was my understanding that once account has freeze and bank affirms there are regular direct deposits that bank would freeze all future deposits. She works for State; therefore, mandatory that paychecks are direct deposit only. She is aware and states she opened a new account in another bank and closed the bank with garnishment. Does the bank garnishment follow her to all banks that she may open after closing the garnished bank? Last, one bank ( in which she has name along with dependent son who receives SS benefits as dependent of father who is disabled. That bank has not responded to the Interrogatories. Can I file judgment against bank? I know that is bank for DD of paychecks now

    • 35x35
      Daniel,
      Jun, 2020

      Cindy, I am not an attorney so anything I share with you is not to be taken as legal advice. 

      A bank garnishment applies to the funds in the account at the time the bank or credit union recevies the order. It doesn't apply to funds that arrive in the future. It is my understanding that you would have to file for another attempt to collect from the bank account.

      Judgments are issued by the court. You could choose to sue the bank if you feel it is not following the law in an attempt to get a judgment against them. I advise you to consult with a local attorney. Suing them without determining why they are limiting the amount of funds remitted to you or how the presence of Social Security funds in the account you are garnishing seems premature to me.

  • M
    Mark,
    Jun, 2020

    A credit card company got a judgement against my wife 16 years ago. I am not on the credit card and an attorney has recently come forth asking her to answer interrogatories. this lawyer wanted me to include my information even though I'm not on the card in the interrogatories and I did not include it. I am not on the card my wife and own everything jointly including our home bank accounts property etc. Does this attorney have any legal right and moving forward with this old judgement? I did add my wife's arisa protected 401K rollover but did not include any of our joint bank accounts, property including our homes possessions since we've been in it for 20 years, she is on SSD and I am 100% disabled veteran. If there is an attorney out there that would like to speak to me or provide some advice it would be much appreciated because the lawyer we hired is not a debt collection attorney and has already taken $1,000 from us. Thank you, Mark.

    • 35x35
      Daniel,
      Jun, 2020

      Mark, I am not an attorney so I can't give legal advice. I will share with you some thoughts, but please don't consider it legal advice.

      Our site is not a proper place to solicit attorneys. For one, your contact information is not viewable and no one could reach you. Two, we would have no way of knowing if someone who was trying to scam you reached you, acting is he or she were extending a helping hand only to take the money and run. Three, when you submit paperwork to the court about your assets and accounts, you are doing so swearing that you are being forthright. Choosing to leave information out because you don't want the other side to know could put you at risk.

      I don't know if there the party trying to collec from violated the law, but I recommend that you contact an attorney who handles violations of the FDCPA (Fair Debt Collection Practices Act). Attorneys who handle FDCPA cases don't charge you a fee, to my knowledge, but will take the case if they feel they can win and get money from the creditor. Do a search online for FDCPA attorney and the name of the city in which you live. Ask the attorney, too, about the info you didn't share for the bank accounts and assets you own jointly. Please report back on how things go for you!

  • K
    kenneth jones,
    Jun, 2020

    I live in pa a non garnishing state, i have a writ of execution notice can they take my property in my home, or cars.

    • 35x35
      Daniel,
      Jun, 2020

      Kenneth, I am not a lawyer, so what I share is my best information but isn't legal advice. A debt that has reached the point your is at in the Keystone State can result in a bank levy, a lien on your home, and could affect a car in your name. PA doesn't exempt any value in a car from collection. I am not familar with how that is enforced, but I doubt that small debts lead to cars that have little value being forced into sale. Check with a local attorney to see what his or her experience is with a car of your value and a debt the size you owe. A bankruptcy attorney should have this information and share it in a free consultation.

  • J
    Jen,
    Apr, 2020

    I have a lien against my home from 2009- a credit card judgement. How long is that active? How do you get it released?

    • 35x35
      Daniel,
      Apr, 2020

      I am not a lawyer, so please don't consider my answer legal advice.

      A lien in the Keystone state has to be filed in the county in which the debtor owns property for it to be enforceable, so it is worthwhile making sure the existing lien was executed properly.

      A judgment lasts for 20 years, but must be revived every five years by the credtor as described in  231 Pa. Code Rule 3026.3

      I don't think you can get it released unless it was not revivied. However, please check with an attorney to see if you can sell or refinance the home with the lien existing if it was not revived. If there is some other reason you wish to have the lien lifted be sure to present the specific facts to the attorney.

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