- Utah wage garnishment rules are fairly simple.
- It is possible for a judgment-creditor to levy a bank account in Utah.
What are the common guidelines for outstanding debt in Utah?
What are the common guidelines for outstanding debt in Utah?
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. 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.
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.
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.
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).
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.
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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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 Q3 2023 was $17.291 trillion. Housing debt totaled $12.489 trillion and non-housing debt was $4.802 trillion.
According to data gathered by Urban.org 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 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in Connecticut credit card delinquency rate was 3%, and the median credit card debt was $435.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.