- 6 min read
- Virginia residents may exempt up to $5,000 from wage and account garnishment.
- Mortgage deficiency balances can be collected be lenders.
- Liens may not be attached to the personal property of Virginia residents.
Learn Virginia's Rules For Garnishment, Liens, and Foreclosure
A lender, collection agent or law firm that owns a collection account is a creditor. The law gives creditors several means of collecting delinquent debt. But before a creditor can start, the creditor must go to court to receive a judgment. See the Bills.com article Served Summons and Complaint to learn more about this process.
The court may grant a judgment to the creditor. A judgment is a declaration by a court the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, a lien on the debtor’s property, and in some states, ask a sheriff to seize the debtor’s personal property. The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which of these tools a judgment-creditor will use depends on the circumstances. We discuss each of these remedies below.
Virginia 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.
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 is allowed for child support (Virginia § 34-29). See the Bills.com Wage Garnishment article to learn more.
Virginia follows the federal exemption limits, and adds some state-specific wage garnishment exemptions. The maximum amount of disposable weekly wages subject to garnishment is generally 25%, unless you earn less than 40 times federal minimum wage. At the rate of $7.25 per hour, you would need to earn $290 per week before being subject to garnishment (Virginia § 34-29). If you are head of household with children, and your gross income is less than $1,750 per month, you as a parent can receive additional exemptions for up to three children (Virginia § 34-4.4.2).
Virginia requires you to receive a notice of garnishment and a list of exemptions found in Virginia § 8.01-512.4.
Levy Bank Accounts
Some states or commonwealths like Virginia call bank account levy garnishment. A levy means the creditor has the right to take whatever money is 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.
Consult with the Bills.com Debt Coach to learn your options for resolving debt, and the costs and time to debt freedom for each.
Under Virginia law, consumers have the option to file a homestead exemption of up to $5,000 to exempt funds in a bank account from levy/exemption. Consumers who are subject to a garnishment should receive a Request for Hearing - Garnishment Exemption Claim [Form DC-454] when they are notified of a pending garnishment. Consult with a Virginia lawyer to learn more about this exemption, and how to file a DC-454.
See the following Virginia codes to learn more about wage and account garnishment: 6.1-125.3, 34-1 through 34, and 8.01-512.4 and .5
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 refinances 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.
In Virginia, a judgment lien can be attached to real estate, and not to personal property (Virginia § 8.01-251(c) and 8.01-458).
If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.
Virginia Statute of Limitations
Each state or commonwealth has its own statute of limitations on civil matters. Here are some of Virginia’s statutes of limitations for consumer-related issues:
|Contract covered by the UCC||4 or shorter by agreement||8.2-725(1) and 8.01-246|
|Judgment||10 or 20**||16.1-94.1 and 8.01-251(a)|
|* The Virginia attorney general’s office wrote an advisory in 2011 indicating it believes 8.01-246(2) applies to credit card debt. Commonwealth courts are, of course, free to interpret the law differently from the AG. ** 10 years for general district court judgments, and 20 years for other courts. Can be extended.|
When the statute of limitations clock starts depends on the circumstances and the particular statute. Generally, it starts when the action accrues, which means the date of breach. For credit card debt, this means the date the payment was missed.
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.
Virginia mortgage and foreclosure laws can be found in Title 55. A lender may foreclose judicially or non-judicially in Virginia. The common method is non-judicial, which takes a minimum of 45 days. A notice of foreclosure must be given to the homeowner 14 days before the sale occurs. Judicial foreclosure is also available in Virginia.
Lenders may pursue a borrower to collect a deficiency balance relating to mortgage foreclosure (Title 8.9A and Title 55).
Virginia Debt Collection Laws
Virginia does not require collection agents to register with or be licensed by the state. The Virginia legislature has not written a law similar to the federal Fair Debt Collection Practices Act. File a complaint with the Virginia Office of Attorney General and the FTC if a Virginia collection agent violates the FDCPA. Consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you.
Virginia & Spouse Debt Liability
Virginia is a common-law state when it comes to family law, and is not one of the dozen community property states. Generally, Virginia spouses have no liability for the debts of the other (Virginia § 55-37). However, under Virginia's doctrine of necessaries rule, spouses have liability for the emergency medical treatment for the other, including follow-up care as long as they are living together (Virginia § 8.01-220.2).
Consult with a Virginia lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.
Dealing with debt
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2023 was $17.06 trillion. Auto loan debt was $1.582 trillion and credit card was $1.031 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 Kansas credit card delinquency rate was 3%, and the median credit card debt was $445.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.