John Smith called about a possible illegal wage garnishment. He says that his employer notified him that his wages will be garnished by a credit card company that had never sued him and that he has not heard from in over 10 years.
This sounded interesting. Was there an FDCPA claim here? When I called Mr. Smith back, he told me that he moved from the Atlanta area 5 years ago and that he did not remember being sued by the ABC Credit Card Company when he did live in the Atlanta metro area. His employer, however, was in receipt of a notice of wage garnishment and would be withholding funds from his wages.
Mr. Smith had a copy of the wage garnishment order, which had a case number on it, which meant that a lawsuit had been filed. The county where the lawsuit was filed has online access and I plugged in the case number. It turns out that the lawsuit was filed back in 2002 and a judgment issued in 2003. Under Georgia law judgments expire after 7 years unless renewed and the online record also indicated that this judgment had been renewed prior to the expiration of 7 years.
When I reported my findings to Mr. Smith, he insisted that he did not recall being served with a lawsuit but he did admit that over the past few years he did occasionally receive collection letters referencing the lawsuit case number. He further stated that since he had moved several times to various cities in Georgia, he did not think anything could happen to him. He was wrong.
We can learn several important lessons from Mr. Smith’s story:
- if you get even a whiff or hear a rumor that you have been sued, check it out. In this case, Mr. Smith had received letters with a case number. Had he checked online or called a lawyer to check for him, he would have discovered that he had been sued.
- more likely that not, Mr. Smith was properly served, but he did not know what to do and he ignored the lawsuit hoping it would go away. This was a bad choice – he should have sought legal advice immediately after being served. Even if he did owe the money, there are a number of possible counterclaims and demands for proofthat could have given him leverage for settlement.
- when a sheriff’s deputy serves a lawsuit, he must fill out a form called a return of service. On this form the deputy must identify who he served. If the return of service identifies the wrong person, you as the defendant, can collaterally attack the service by hiring a lawyer to file paperwork asking the judge to vacate the judgment on the grounds of bad service. If the statute of limitations has run, you could be done with the claim.
- while Mr. Smith could, in theory, collaterally attack service of process, he has waited very late to pursue this remedy. Not only would he have to file a motion to set aside the judgment but he would have to file a motion to delay the execution of the judgment. Even if the judge grants the motion, Mr. Smith will incur hundreds or thousands in legal fees
- had Mr. Smith discovered that he was sued, he could have hired a lawyer to try to settle the claim for pennies on the dollar. During the last 10+ years, Mr. Smith has moved around a lot and has had several jobs. The judgment has been sold several times. Five years ago, for example, the lawyer holding the judgment did not know where Mr. Smith was or where he worked. I could have settled this claim for 10 cents on the dollar or better. Now, the lawyer knows where he works and has a pending garnishment. We’ll be lucky to settle for 80 cents on the dollar if he has cash to pay a lump sum.
Remember, this mess arose from a lawsuit filed over 10 years ago on a credit card account that had last been used about 15 year ago. Collection lawyers have many resources to track down debtors and they do not hesitate to use them.