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1.4.11 Collection on the Judgment

Once a court judgment issues against the consumer, the judgment creditor is able to use a variety of powerful post-judgment remedies to collect from the judgment debtor. Specific remedies vary from state to state but may include garnishment of wages or bank accounts, liens on property, or the ability to levy on personal property. These collection tools are subject to state and federal limits that exempt certain income and property from collection.384

Studies show that wage garnishment is deployed with great frequency. ADP, the nation’s largest payroll company, analyzed payroll data for thirteen million employees, finding that three percent of all employees had wages taken for a consumer debt in 2013385—an estimated four million American workers.386 Research in Colorado found that thirty-eight percent of collection lawsuits in a sample of 375 cases filed by debt buyers resulted in wage garnishment.387 Research in Missouri illustrates that wage garnishments can take place years after a collection action was filed.388

Research on data from Missouri offers insights into the prevalence of bank account garnishment in one jurisdiction. There bank account garnishment comprised fourteen percent of the $339 million garnished in Missouri between 2009 and 2013.389 The amount garnished was typically about $500, but in cases where the garnishment emptied the bank account entirely the median amount garnished was $350.390 Bank account garnishments were attempted frequently although they did not always recover money. For example, in 2012, judgment creditors attempted to garnish judgment debtors’ bank accounts 59,000 times and were successful 13,000 times.391

In order make use of these post-judgment remedies, states generally make postjudgment discovery proceedings available to creditors to force judgment debtors to answer questions about their assets. The creditor may have the right to issue interrogatories to the debtor, summon the debtor to a debtor’s examination to answer questions in person, and issue a subpoena duces tecum requiring the debtor to produce assets or records.392 In most if not all states, the debtor can be held in contempt of court for failure to appear at a debtor’s examination.393 As a result, judgment debtors may make payments—including using exempt income—to avoid arrest.

Footnotes

  • 384 See generally National Consumer Law Center, Collection Actions Ch. 13 to 15 (4th ed. 2017), updated at www.nclc.org/library.

  • 385 ADP Research Institute, Garnishment The Untold Story 8 (2014). See also ADP Research Institute, The U.S. Wage Garnishment Landscape: Through the Lens of the Employer 7 (2017) (study of wage garnishment with 2016 payroll data found that the rate of garnishment for consumer debt remained the same).

  • 386 Paul Kiel, Unseen Toll: Wages of Millions Seized to Pay Past Debts, ProPublica, Sept. 15, 2014.

  • 387 Ellen Harnick, Lisa Stifler, and Safa Sjadi, Debt Buyers Hound Coloradans in Court for Debts They May Not Owe (Center for Responsible Lending, Dec. 2016).

  • 388 Paul Kiel, So Sue Them: What We’ve Learned About the Debt Collection Lawsuit Machine, ProPublica, May 5, 2016 (“In 2013, plaintiffs garnished a total of $17 million, but only about 14 percent of that was from cases actually filed in 2013. A quarter came from suits filed in 2008 or earlier.”).

  • 389 Id.

  • 390 Id.

  • 391 Id.

  • 392 National Consumer Law Center, Collection Actions § 16.2.1 (4th ed. 2017), updated at www.nclc.org/library.

  • 393 National Consumer Law Center, Collection Actions § 16.2.3 (4th ed. 2017), updated at www.nclc.org/library. See generally Am. Civil Liberties Union & Brennan Ctr. for Justice, Comment to CFPB Regarding Debt Collection Rulemaking, No. CFPB-2013-0033 (Feb. 28, 2014), available at www.aclu.org (citing statistics about use of civil contempt).