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Old Judgment Collection

Mark Cappel
UpdatedApr 11, 2024
Key Takeaways:
  • A creditor needs a court judgment to garnish wages legally.
  • The statute of limitations is a defense that must be raised at trial.
  • Filing bankruptcy will wipe out any judgment, if you qualify to file.

My wages are being garnished for a debt that is over 16 years old. How did this happen? What about the statute of limitations?

I am a single residing in Florida. About 16 years ago i defaulted on a car loan, (divorce). A month ago i received a letter from a lawyer stating i was being sued $7,000 and that I needed to reply within 20 days. i did some research and sent them a return receipt letter explaining the statute of limitations and so on, and not to bother me again. no where in this 5 page letter was there a court date, or the word "appear". last week when i received my paycheck, it was $72 short. after contacting my payroll comp. i found out the same lawyer had my wages garnished even though i had replied within the 20 days. i immediately called the lawyer at which time he explained the amount wasn't $7,000 (as written), but it was actually $23,000. I have an appointment with a lawyer next week. i live check to check as it is, if my lawyer can't get this dismissed, is filing bankruptcy an option? the only property i own is a 1994 truck, and my credit is already a mess.

To obtain a legal wage garnishment, this creditor (or its attorney) had to obtain a judgment against you, which means that it had to file a lawsuit and, at least in theory, serve you with a copy of the lawsuit with sufficient notice to allow you to respond, initially with a written response, and subsequently by appearing in person or by attorney in court.

The facts in your question make me think one of two events transpired. My first guess is a judgment was entered against you many years ago. This lawyer is now working to collect on an old unpaid judgment, which was entered against you at some point soon after the defaulted car loan. Perhaps you were too busy with the divorce or other things going on in your life to even realize that you had been sued at the time. Perhaps you were never given adequate notice of the lawsuit and judgment.

My second guess is it is possible, though unlikely, the lawyer did not have a judgment and sent your employer a notice of garnishment, which your employer honored. Such a practice would be illegal on the part of the lawyer and negligent on the part of your employer to follow an illegal garnishment order. Again, this sequence of events is pure speculation on my part, but it also fits the facts you provided.

There are three reasons I believe the first scenario I outlined above -- it is an old judgment you did not notice or recall -- is close to accurate. First, the statute of limitations in Florida for written contracts, such as an auto loan, is five years and the statute of limitations for the collection of a judgment is 20 years. I sometimes see debt purchasers pursue people for old non-judgment debts, but rarely for ones this old, and almost never with the involvement of an attorney because no legal action can be taken to enforce such debts. The only reason that I can think that this attorney would be contacting you about this debt would be if it were an old judgment.

Second, the speed with which the attorney filed a wage garnishment with your employer leads me to believe that the creditor already had a judgment against you. The court process takes a fair amount of time, and it would be nearly impossible for a creditor to file a lawsuit, obtain a judgment, and begin garnishment within a month, the amount of time that has passed since you received the demand letter from the creditor's attorney. However, if the attorney already had a judgment and had the garnishment documents drawn up, the attorney could have sent them to your employer immediately upon receiving your response refusing to pay the amount owed. This second scenario would better explain how this attorney was able to start garnishing your wages in such a short amount of time.

Third, the amount of the debt, and the discrepancy between the $7,000 claimed in the letter and the $23,000 demanded when you called the attorney's office, makes me think that this may be an old judgment. The original judgment amount may have been for $7,000, which is why that amount was quoted in the attorney's recent letter. However, Florida law allows judgment creditors to charge 10% interest on unpaid judgments, which is why, after 16 years, the balance owed has increased so much. The 10% interest alone would account for over $11,000 of the additional money the creditor claims you owe, and with attorney's fees and court costs, I can imagine how this debt could have balloon from a $7,000 judgment 16 years ago to a $23,000 debt today.


The important question is what can you do about the garnishment.

Start by learning if a judgment was filed against you. The only way to know for certain is to contact the clerk of the courts in county where you lived at the time a judgment would have been entered for this debt. Also, if you contact the attorney's office and ask if their client has a judgment against you, they should be able to tell you and may provide you with a copy of the document.

Once a judgment has been entered, it can be difficult to prevent a creditor from proceeding with garnishment, bank account levies, or other means of enforcement. (See the document Florida Collection Laws to learn more about your rights and liabilities.) However, one of the few ways judgment enforcement can be stopped effectively is for the judgment-debtor to file for bankruptcy protection.

If you qualify to file a Chapter 7 bankruptcy case, you may be able to discharge the debt entirely. It is never too late to seek bankruptcy protection on an outstanding judgment. The fact that so many years has passed since this judgment was issued should have no effect on its dischargeability in bankruptcy. Consult with an experienced bankruptcy attorney in your area to learn if filing for bankruptcy protection is a viable option in your case.

Visit the bankruptcy page for more information about bankruptcy and how it may be able to help you.

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



Dealing with debt

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in New Hampshire, 17% have any kind of debt in collections and the median debt in collections is $1672. Medical debt is common and 6% have that in collections. The median medical debt in collections is $500.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



JJohn Haight, Dec, 2013
Discover credit card won a judgment against me in Ohio from 2007, and recently had my payroll garnished at 19% interest rate. The original debt was $7,000 but now the account balance is $17,000. Can a judge grant a creditor a 19% interest rate for a civil judgment in Ohio? I am trying to find the maximum rate an Ohio court will allow a creditor, and found most courts grant a maximum of 8%.
BBill, Dec, 2013
See the article Ohio Collection Laws to learn more about your rights and liabilities as an Ohio resident. Specifically, read the "Ohio Post-Judgment Interest" section for a partial answer to your question.

Under Ohio law, if your Discover credit card agreement spelled out you were agreeing to a 19% post-judgment interest rate, then Ohio allows the court to award that much. If there's no post-judgment amount listed in your credit card agreement, then the court must award the interest rate determined by the Ohio Tax Commissioner.

Consult with an Ohio lawyer who has consumer law experience if you think the interest rate set here is contrary to Ohio law.
AAndrea, Nov, 2013
My husband has one judgment on his credit from 2007 for a repossessed vehicle. We are trying to qualify for a mortgage and cannot with this judgment on his credit report. How can I get it removed? I have sent the three bureaus a dispute letter for this judgment and a few other negative accounts on his credit. I heard back and the judgment was not removed. What can I do now?
BBill, Nov, 2013
The answer to your question can be found in your state's rule for the statute of limitations on a judgment. See also the article Judgment On a Credit Report to for an explanation of how your state's statute of limitation for a judgment intersects with the federal Fair Credit Reporting Act.
JJP, Jun, 2013
Hello, I have two credit card debts from 2007 in California when i went default from Bank of American. They filed a lien on property with both accounts when this attorney firm received my accounts (or purchased it). The lien happened around 2008-2009. I haven't been able to pay it back, and it went from $3500 and $1700, to a total of $11k between the two from "interest" at one point they were willing to negotiate to settle for 60% payback, but i couldnt afford that a few years ago, now its been 6 years and no further action has been taken. I want to prepare for purchasing a home but i can't because of this lien on property i have. What Can I do to remove this debt because it has passed the 4year mark for status of limitations or if i wait for the 10 years, can i request the debt to be removed? If so how?
BBill, Jun, 2013
In California, a judgment remains enforceable for 10 years from the time it is issued. However, a judgment-creditor can renew a judgment for successive 10-year period, provided it does so before the judgment expires. Given your desire to buy a home and the fact that you need to satisfy the judgment, negotiating a settlement like the one they offered before seems your best bet. Keep in mind that if you contact them to negotiate a settlement, they may figure out that you want to accomplish some goal that requires removing the judgment. That could stiffen their negotiating position. Also, be careful about keeping money in a bank account when their is a judgment against you, to protect it from a bank levy.
JJen, Feb, 2013
I currently live in Delaware. I moved here in June of 2010 from CA. I was cruising the Internet one day and came across the court website of the county I used to live in. I looked up my married name and my maiden name. I came across a case with my maiden name (not common) brought on by another law firm that after some online searching buys charged of credit card debt. The date of the case and filling was right before I moved from CA. I guess I was never served papers. The case was dismissed without prejudice. Does this mean they can sue me again? I have one past account that has changed collection agencies every 6 months or so. I asked in writing to one company in 2006 when they purchased from the original debtor to see proof that it was my debt. I believe the SOL is passed on the account, at least for DE. The last time I ran a credit report it didn't come up as a judgement, but can that, even though I was never served upon?
BBill, Feb, 2013
The term dismissed without prejudice means the court told the plaintiff, in effect, "We will not hear this case now based on what we see in the complaint, but if you want to raise this issue again, we'll listen." This is in contrast to dismissed with prejudice, which means, "Don't you dare darken our door again with this case." Here, it is possible for the plaintiff — the party filing the lawsuit against a defendant — to refile its case against you.

You mentioned your state's statute of limitations. In all but two states, the time expiring on a statute of limitations clock for breach of contract does not mean the plaintiff is barred from filing a lawsuit. The statute of limitations gives you an affirmative defense you can raise during a trial to ask the court to dismiss the case. See the article Statute of Limitations to learn more about this issue.

You mentioned a judgment. A judgment is given to a plaintiff after a successful lawsuit. If the lawsuit you mentioned was dismissed, then that lawsuit would not result in a judgment.

Credit reports are incomplete. Let's say you borrow $10 from a co-worker for lunch, which you repay a day or two later. That loan will not appear on your credit reports because your coworker never bothered reporting it to the big-three consumer credit reporting agencies (CRAs). Some lenders, such as buy-here pay-here auto dealers, have a reputation for not reporting their transactions to the CRAs. They are under no obligation to do so, but if they do, their reports must be accurate and timely. The same is true for judgments, in that not all find their way into consumer credit reports. Therefore, do not rely on the fact that a collection account, judgment, bankruptcy, or foreclosure does not appear on a credit report to mean those events never happened.