Provo Attorneys
Do you owe someone money and they have a money judgment against you? Do you own quick money lending companies? A judgment creditor is someone you owe money to and they have a court money judgment against you. Once they have a judgment, here are the collections efforts your judgment creditor can use to collect the money owed:
(1). Bank Garnishments. The judgement creditor can serve a court order on your bank asking the bank to set aside all your bank account money until an objection period is over. If you have objections to the bank garnishment, you will need to object within 21 days or your bank will send the money to your judgment creditor. The bank is supposed to serve you with the bank garnishment allowing you to object, if needed.
If your spouse is jointly on your bank account, then your spouse needs to intervene and take appropriate measures to protect his/her ½ interest in the bank account monies. Jointly owned accounts, where the one joint account owner is not the judgment debtor, is a good reason for you to object to the bank garnishment to ensure that only appropriate funds are garnished.
A bank garnishment can be filed over and over until the debt is paid.
(2). Wage Garnishments. Wage garnishments are served on your employer by your judgment debtor and require mandatory withholding up of to 25 percent of your disposable earnings for up to 120 days.
The most your judgment creditor can take is:
(a)(1) 50% of the defendant’s disposable earnings for a writ to enforce payment of a judgment for failure to support dependent children or 25% of the defendant’s disposable earnings for any other judgment; or
(a)(2) the amount by which the defendant’s disposable earnings for a pay period exceeds the number of weeks in that pay period multiplied by thirty times the federal minimum hourly wage prescribed by the Fair Labor Standards Act in effect at the time the earnings are payable.
If no objection to the wage garnishment is filed, then after 21 days the employer must deliver the monies to the judgment creditor for the lesser of:
(A) one year;
(B) 120 days after service of a second or subsequent writ of continuing garnishment;
(C) the last periodic payment;
(D) the judgment is stayed, vacated or satisfied in full; or
(E) the writ is discharged.
PRIORITY OF WAGE GARNISHMENTS:
If several wage garnishments are served, the priority of the wage garnishments is determined by the time of service of the garnishment on the employee. Wage garnishments for domestic support obligations trump all other garnishments.
PREJUDGMENT WRIT OF ATTACHMENT:
Sometimes a creditor knows that the only asset a judgment debtor has is their home, or another asset which can be readily sold prior to a money judgment being entered. When a Writ of Execution to sell personal property is served, it serves as a freeze order on selling of personal assets by the judgement debtor. But no such freeze order exists at the beginning of a collections lawsuit unless a prejudgment writ of attachment is ordered.
Prejudgment writs of attachment are rarer than bank garnishments, but can secure eventual payment for the judgment creditor’s money judgment.
The legal grounds for a prejudgment writ of attachment are as follows and must be proved by the person seeking the prejudgment writ:
(1) that the property is not earnings and not exempt from execution; and
(2) that the writ is not sought to hinder, delay or defraud a creditor of the defendant; and
(3) a substantial likelihood that the plaintiff will prevail on the merits of the underlying claim; and
(4) that the defendant is avoiding service of process; or
(5) that the defendant has assigned, disposed of or concealed, or is about to assign, dispose of or conceal, the property with intent to defraud creditors; or
(6) that the defendant has left or is about to leave the state with intent to defraud creditors; or
(7) that the defendant has fraudulently incurred the obligation that is the subject of the action; or
(8) that the property will materially decline in value; or
(9) that the plaintiff has an ownership or special interest in the property; or
(10) probable cause of losing the remedy unless the court issues the writ.
SELLING PERSONAL PROPERTY:
A judgment creditor may sell certain personal property of the debtor to satisfy the debt. Selling personal property is expensive and the property sold generally garners very little actual money. There are specific ways the personal property must be sold and you must advertise the sale.
SELLING A HOUSE:
Judgment creditors may obtain and place a judgment lien on a personal residence and initiate procedures to sell the residential home. Judgment liens normally do not go away in federal bankruptcy law unless specific action is taken by the debtor with the federal Bankruptcy Court.
Judgment liens are filed with the county recorder’s office where the judgment was obtained and are valid state-wide, attached automatically to any property owned by the judgment debtor, and even attaches to any new property that may be purchased by the judgment debtor in the future. It is a very powerful collections tool, but it can take time. What can happen is that a judgment lien is placed on a home which already has 1-2 first in-time mortgages. Eventually, that home may be sold, or refinanced and the judgment lien will come to light and must be dealt with before the home can be refinanced or sold.
WRIT OF REPLEVIN—ASKING THE COURT TO ORDER PROPERTY RETURNED:
A Writ of Replevin just means a court order requiring the debtor to return a specific piece of property back to the judgment creditor, or back to the plaintiff in a collections action. Writs of Replevin are rare remedies but can be useful when you have a specific piece of identifying personal property that needs to be returned.
PROPERTY EXEMPT FROM THE COLLECTIONS PROCESS:
Utah law does not want to leave a debtor broke with all their possessions sold to satisfy debts because this will leave the debtors in position worse than they were already in and possibly place them in need for government welfare.
As a result, most all states have mandatory exemptions of property that judgment creditors can touch in the collections process.
THE UTAH EXEMPTIONS ACT:
The Utah Exemptions Act is found at 78B-5-505 (2017) and specifically describes what personal and real property cannot be sold or collected upon for satisfying a judgment.
Here is a list of the most prominent exempt property that you get to keep in the face of a judgment creditor:
(i) Burial Plot. A burial plot for the individual and the individual’s family;
(ii) Health Aid. Health aid is reasonably necessary to enable the individual or a dependent to work or sustain health;
(iii) Disability Benefits. Benefits the individual or the individual’s dependent have received or are entitled to receive from any source because of:
(A) disability;
(B) illness; or
(C) unemployment;
(iv) Medical Pay Benefits. Benefits paid or payable for medical, surgical, or hospital care to the extent they are used by an individual or the individual’s dependent to pay for that care;
(v) Veterans Benefits;
(vi) Domestic Support Payments. Money or property received, and rights to receive money or property for child support;
(vii) Alimony Payments. Money or property received, and rights to receive money or property for alimony or separate maintenance, to the extent reasonably necessary for the support of the individual and the individual’s dependents;
(viii) (A) one:
(I) clothes washer and dryer;
(II) refrigerator;
(III) freezer;
(IV) stove;
(V) microwave oven; and
(VI) sewing machine;
(B) all carpets in use;
(C) provisions sufficient for 12 months actually provided for individual or family use;
(D) all wearing apparel of every individual and dependent, not including jewelry or furs; and
(E) all beds and bedding for every individual or dependent;
(ix) Art Work. Except for works of art held by the debtor as part of a trade or business, works of art:
(A) depicting the debtor or the debtor and his resident family; or
(B) produced by the debtor or the debtor and his resident family;
(x) Personal Injury Settlements. Proceeds of insurance, a judgment, or a settlement, or other rights accruing as a result of bodily injury of the individual or of the wrongful death or bodily injury of another individual of whom the individual was or is a dependent to the extent that those proceeds are compensatory;
(xi) Life Insurance Proceeds. The proceeds or benefits of any life insurance contracts or policies paid or payable to the debtor or any trust of which the debtor is a beneficiary upon the death of the spouse or children of the debtor, provided that the contract or policy has been owned by the debtor for a continuous unexpired period of one year;
(xii) Life Insurance Proceeds for Children. The proceeds or benefits of any life insurance contracts or policies paid or payable to the spouse or children of the debtor or any trust of which the spouse or children are beneficiaries upon the death of the debtor, provided that the contract or policy has been in existence for a continuous unexpired period of one year;
(xiii) Unmatured Life Insurance Proceeds. Proceeds and avails of any unmatured life insurance contracts owned by the debtor or any revocable grantor trust created by the debtor, excluding any payments made on the contract during the one year immediately preceding a creditor’s levy or execution;
(xiv) Retirement Assets. Except as provided in Subsection (1)(b), any money or other assets held for or payable to the individual as a participant or beneficiary from or an interest of the individual as a participant or beneficiary in a retirement plan or arrangement that is described in Section 401(a), 401(h), 401(k), 403(a), 403(b), 408, 408A, 409, 414(d), 414(e), or 457, Internal Revenue Code;
There is a one year look back period where monies deposited within one year of a collection effort may still be collected upon.
(xv) QDRO. the interest of or any money or other assets payable to an alternate payee under a qualified domestic relations order as those terms are defined in Section 414(p), Internal Revenue Code;
(xvii) GUNS. Except for curio or relic firearms, as defined in Section 76-10-501, any three of the following:
(A) one handgun and ammunition for the handgun not exceeding 1,000 rounds;
(B) one shotgun and ammunition for the shotgun not exceeding 1,000 rounds; and
(C) one shoulder arm and ammunition for the shoulder arm not exceeding 1,000 rounds.
(3) Disability benefits, as described in Subsection (1)(a)(iii)(A), and veterans benefits, as described in section (v), may be garnished on behalf of a child victim if the person receiving the benefits has been convicted of a felony sex offense against a child and ordered by the convicting court to pay restitution to the victim. The exemption from execution under this section shall be reinstated upon payment of the restitution in full.
(4). Your House. A person may shield up to $30,000 in their personal residence. If married, each spouse may shield and protect $30,000 each. This exemption only applies to a personal residence where you reside.
(5). Other Real Property. $5,000 in value if the property consists in whole or in part of property which is not the primary personal residence of the individual.
(6). Cars. You can protect the first $3,000 in equity in one car per person.
(7). Household Goods. An individual is entitled to exemption of the following property up to an aggregate value of items in each subsection of $1,000:
(i) sofas, chairs, and related furnishings reasonably necessary for one household;
(ii) dining and kitchen tables and chairs reasonably necessary for one household;
(iii) animals, books, and musical instruments, if reasonably held for the personal use of the individual or the individual’s dependents; and
(iv) heirlooms or other items of particular sentimental value to the individual.
(8). Tools of the Trade. An individual is entitled to an exemption, not exceeding $5,000 in aggregate value, of implements, professional books, or tools of the individual’s trade, including motor vehicles to which no other exemption has been applied, and that are actually used by the individual in the individual’s principal business, trade, or profession.
BANKRUPTCY:
Filing for Bankruptcy in a Federal Bankruptcy Court will stop most all collection efforts at the moment you file for Bankruptcy. Bankruptcy will eliminate almost 99 percent of your debts which you may have.
CONCLUSION:
The Provo attorneys at Howard Lewis & Petersen, PC can help people navigate their way through collecting a Utah judgment or defending against collection efforts, including filing Bankruptcy.
Call (801) 373-6345 for a consultation on your legal problem.
