April 3, 2020

What Should You Do About a Surprise Wage Garnishment?

unexpected wage garnishmentIn my Atlanta area bankruptcy practice I sometimes get calls from a very anxious man or woman who tells me that their payroll office has received a wage garnishment order but the employee has no idea why or where it came from. What should they do? Here is how I would approach this problem.

First, understand that you have to move quickly. If your employer receives an order of continuing wage garnishment, they have to honor it within 45 days – here is what the summons looks like.

If your employer does not honor the garnishment and withhold wages, your employer can be “punished” for not obeying the order by having the entire judgment held against the employer. debt. Needless to say, your employer does not want to get stuck paying your debts.

Who is the Plaintiff?

Your first step should be to find out who the plaintiff (creditor) is in your case and the basis of their claim. If the holder of the garnishment order is a student loan creditor or a taxing authority, different rules apply and you need to speak to a lawyer immediately.

If the claim is from a collection agency, there is a good chance that this debt has been sold multiple times by creditors and collection agencies so you may not recognize the name of the collection agency.

For example, if you owe a debt to Chase Bank for a credit card, Chase may have sold that debt to Allied Systems, who may have sold it to LVNV or some other agency. Do not assume that the claim is bogus simply because you do not recognize the name of the plaintiff.

When was a Lawsuit Filed Against You?

If a creditor has obtained a judgment against you that means that the creditor has previously filed a lawsuit and obtained a judgment. About 95% of judgments on consumer loans are default judgments, meaning that the creditor filed a lawsuit and no one filed a written answer or otherwise responded.

You may be able to find out the details of the lawsuit by using online court records. Most magistrate, state and superior court clerks in the Atlanta area offer online case search so you may be able to discover a case number and the name of the collection agency’s lawyer.

If you reach out to the collection lawyer you may or may not get very far. Most collection law firms in the Atlanta area are volume practices that file dozens of cases every day. They also hear all kind of stories and denials from upset defendants. If you can get hold of someone who will talk to you, ask for copies of the lawsuit and a copy of the “return of service” showing when and by whom you were served.

Was Service of the Lawsuit Valid?

Before a judgment can be entered, you have to be legally served with a copy of the lawsuit. Usually sheriff’s deputies handle service. I have seen many cases where service was invalid – a busy deputy knocked on the door of whatever address is on the lawsuit, handed whoever answered the door a stack of papers then left.

If the address on the lawsuit was inaccurate, or old, the deputy may have served someone who is not you and you would never have known.

Sometimes the judgment against you is a “domesticated judgment” from another state. In these cases, a plaintiff sued you at an address they had for you in another state. Here, too, if no one answered they would get a judgment in that state then they would hire a lawyer in Georgia to “domesticate” the judgment in the county where you live or work.

The rules of service can vary from state to state but generally speaking, you can be considered legally served if the sheriff’s deputy confirms you live at a residence and then hands the lawsuit to a competent person.

This means that service may be valid if the sheriff’s deputy knocked on your door and handed the lawsuit paperwork to your teenage son, or to your 85 year old mother. If the “return of service” paperwork shows that the sheriff’s deputy came to the address where you lived and handed the lawsuit paperwork to someone in your household it will be very difficult for you to convince a judge that you were not properly served.

On the other hand, if you have a common name like Smith, Johnson or Thompson and the address on the lawsuit is one where you never lived, it will be much easier to prove that you were not properly served.

If service was bad, you can make a “collateral attack” on the judgment. This means that you are not addressing the merits – do you owe the debt or not – but you are asking the judge to undo the judgment because service was bad and you were denied your legal right to respond.

My experience has been that if you can prove that service was defective most collection lawyers will voluntarily vacate the judgment and the garnishment. They may then start the process over again using the correct address but you will have weeks or months to either negotiate a settlement, mount a defense or file bankruptcy.

Your Credit Reports May Reveal Essential Information

Another part of your research should be to request a copy of your credit reports. You can do this for free at AnnualCreditReport.comAnnualCreditReport.com. Your credit reports should document to whom you owe money and if a lawsuit has been filed.

Your immediate goal in the case of an unexpected wage garnishment is to stop the garnishment to give you time to decide what to do. If you really do not owe the money, you can ask for your day in court or perhaps your day at a mediation table. If you do owe the money, you will want time to either negotiate a settlement or to talk to a bankruptcy lawyer.

As I noted at the beginning of this article, do not delay in taking action. Getting money back from a garnishing creditor is much more difficult than preventing the wage garnishment in the first place. Further, even if the debt is not legitimate, you could end up legally owing it if you do not assert your rights.

Ginsberg Law helps men and women in the Atlanta area deal with debt problems. If you are facing a lawsuit or a wage garnishment, we’d be happy to help you. Our number is 770-393-4985.

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.

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