Creditor's Rights Flashcards
Garnishment [tested Feb 2021 & most highly tested topic]
A judgment creditor can collect on a civil judgment, by garnishment of assets or payments due to judgment debtors. Judgment debtors can file objections to garnishments if :
1) the debtor has filed for bankruptcy
2) garnishment was not properly issued or is invalid, 3) social security funds (can’t be touched) even in debtor’s bank account
4) garnishment is barred by an installment payment order
- An installment payment order protects only the wages of the debtor .It doesn’t suspend the writ of garnishment of non-periodic payments or of an income tax refund or credit.
SOL, periodic & non-periodic garnishments
A judgment creditor has the legal right to garnish monetary assets or payment due to them.The SOL for collection on a judgment is 10 years.
A judgment creditor may seek a periodic garnishment from the court. Periodic garnishments are generally sent to employers or any individual who makes periodic payment to the debtor. The PG can direct the employer / individual to withhold payments & pay the JC directly until the judgment is satisfied. An employer can repeatedly withhold a max 25% of disposal earnings for the workweek.
A JC can also seek a non-periodic (one time) garnishment of a bank account in an amount not exceeding the judgment balance
If a non-periodic garnishment of a bank account is sought, and the account owner owns a joint bank account, the creditor is only entitled to 1/2 of what is in the account because there is a presumption that the account holders are equal owners/contributors.
Collection Efforts /Uniform Voidable Transactions Act
Collection efforts may begin 21 days after entry of the judgment.
The UVTA states that a transfer is voidable if it is made w/actual intent to hinder, delay, or defraud any creditor of debtor. JC has to prove this by a PREP OF EVIDENCE
Seizing Real and Personal Property
A JC can seek an order for seizure of property from the court. This includes personal property such as goods and chattels. Confiscation of the personal property would result in the sale of that property, the proceeds of which would be delivered to the JC, towards the judgment balance.
Can also levy against real property & place a judgment lien against the property.
