Cinderella’s Sad Story of Garnishment

Once upon a time, Cinderella had a money judgment entered against her.  She thought nothing of it at the time because she could no more pay her debt than go to the ball.  Then along came her Fairy Godmother and next thing you know, Cinderella had won the Prince Charming lottery. Right in the middle of happily ever after, a creditor garnished Cinderella’s newfound wealth.  Her brand new great big mound of money was swept clean from her account, just like that—poof!—it was gone.  “Surely you would not take my good fortune from me!” Cinderella protested. “The judgment is good for 20 years,” replied the creditor.  And thus Cinderella went from rags to riches and back to rags again.   A Money Judgment is just a piece of paper, EXCEPT a creditor may watch your bank account over the next 20 YEARS.  If your credit score goes up, that creditor might reappear.  With a Money Judgment, he may get your car, your real estate (except homestead), or garnish your bank account without prior notice to you, freezing any good fortune you come into. Everybody should pay their debts; however, certain incomes are exempt to prevent a choice between paying the […] Read More

Exempt Incomes from Money Judgments

Money can’t buy happiness, but it sure makes misery easier to live with.  That is the idea behind Social Security, disability, pensions, and income that provides more than one-half the support for dependant or minor children—those are exempt incomes from money judgments. Small Claims Court can be a lot bigger than you think.  Even though it only deals with matters less than $5,000, that can be a big claim if you have limited means. Everybody should pay their debts, but you should not have to decide whether to buy food or pay the electric bill.  Thus there are certain incomes that are exempt from money judgments. The key to an exemption is that you have to claim it.  Just because you are eligible for a collection exemption does not mean you automatically receive it.  Exemptions have to be filed within 20 days of the Notice of Garnishment that you receive after your account has been frozen. A Judgment is bad, but ignoring it is worse.  Seek competent legal advice to learn more about collection exemptions.  (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions and how to claim them.) Read More

What Is Good in 20 Years?

You can get a 20-year warranty on a mattress, roof shingles, and vinyl flooring.  You know what else is still good in 20 years?  That debt judgment against you. So you got sued in Small Claims Court.  If you had nothing for a creditor or debt servicer to collect, then they still did not get paid and all they got was a judgment against you.  The thing is, that judgment is good for 20 years.  Your creditor or debt servicer can collect at any time during those 20 years.  That is a good deal for creditors and debt servicers…not so much for you. The other thing is, once you have a money judgment against you, the collection can happen with fewer symptoms than a heart attack.  You wake up one morning and the money in your bank account got disappeared.  They can garnish everything in your account up to the amount owed without prior notice.  Again, a good deal for creditors and debt servicers…not so much for you, especially if you were trying to pay rent that day. Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in […] Read More

No Defense? No Problem

Debt collectors are standing by to take up to 25% of your paycheck.  Did you have trouble paying your credit card bill?  Maybe you did not notice the Small Claims Court suit filed against you (or you did not know what to do about it)?  No problem.  If you did not show up to your court date the debt collector has a simple remedy:  Get a default judgment against you that allows him to take 25% of your paycheck every payday. That is no big deal, right?  After all, what is a quarter of your earnings?  What would you use that money for anyway—Rent?  Groceries?  Gas to get to work?  Everybody can give up 25% of their net income, right? Everybody should pay their bills; however, you should not have to decide whether to pay your credit card bill or put food on the table.  There are exemptions you can file to protect certain incomes so that you can pay for basic needs.  Exempt incomes include: Income of head of household at a certain level Social Security benefits Pension Disability The key to an exemption is you have to claim it.  Even if you have an eligible exemption, you do […] Read More

Payback is Heck with Consumer Debt

Being in debt is bad.  Having up to 25% of your wages garnished, or having your bank account swept clean without advance notice can be a life-affirming experience…not in a good way. In Florida, debt collectors can take up to 25% of your net pay for things like old credit card debt, medical bills, and/or student loans.  Or they can sweep your bank account for the amount that you owe without prior notice—you wake up one day and whatever you owe them, that money got disappeared.  Later when you receive that notice of garnishment, you also get a form to file for exemption.  Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car—that is why certain incomes are eligible for exemption, like head-of-household at a certain level, pension income, Social Security benefits, or disability. The key to that exemption is that you have to claim it.  Just because you are eligible does not mean you automatically get it. Seek competent legal advice to learn more about exemptions from judgment.  (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions […] Read More

Not Going Anywhere for 20 Years?

The standard operating procedure in credit card debt is not to be sued by your credit card company, but instead by a third-party debt-buyer.  Most consumers arrive at Small Claims Court and the Judge says:  “Do you admit or deny the claim?”  They admit it, saying they need time to pay; then they make a repayment plan with the debt-buyer.  Instead of asking for verification, most consumers rely on third-party debt-buyers to have their facts straight.  That can be a costly silence. When you get a credit card, you sign a credit card agreement that says you agree to the terms of that contract.  That is not what the debt-buyer sues you on.  Instead of suing you on the credit card debt or contract debt, the debt-buyer sues on Account Stated. For debt-buyers it is a numbers game.  They buy millions in debt for pennies on the dollar.  They purchase a spreadsheet of data without representations or warranties, and they do not necessarily know that the information is correct.  The debt-buyer does not know if you owe anything or not. When pushed to a trial with live testimony, the debt-buyers lose.  In Small Claims Court we like to agree to […] Read More

Garnishment is Better Than Debtors’ Prison

Garnishment is better than debtors’ prison because it gives the debtor a chance to repay their bills instead of relying on their family to buy them out of hock…but it is still not great.  With garnishment, money just disappears from your paycheck or bank account, then you receive Notice of Garnishment (as if you had not noticed). Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car.  That is why certain incomes are eligible for exemption. If you are head of household supplying more than one-half the income to support a minor child, that income is eligible for exemption. If your income comes entirely from Social Security or a pension fund, that income is eligible for exemption.   So, money disappears out of your account and then you get a Notice of Garnishment, what can you do then?  Then you can fill out the form (that comes with the Notice) to file for an exemption. The key to that exemption is that you have to claim it.  Just because you are eligible does not mean you automatically get it. Whether or not you are eligible for an […] Read More

The Way Garnishment Works

The way garnishment works is first they take your money, THEN they tell you they have taken it.  You wake up one day and whatever you owe them, that money got disappeared.  Later when you receive that notice of garnishment, they also send you a form to file for exemption. If you are head of household supplying more than one-half the income to support a minor child, that income is eligible for exemption. If your income comes entirely from Social Security or a pension fund, that income is eligible for exemption. People have options.  Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car—that is why certain incomes are eligible for exemption.  You do not have to promise your Social Security income to cover a collection judgment; claim an exemption instead. Seek competent legal advice to learn more about exemptions from judgment.  (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions and how to claim them.)  St. Johns Legal Aid is located at 222 San Marco Avenue in St. Augustine and they are open 8:30 a.m. to 5:00 […] Read More

Garnishment: Paying for Parsley

Parsley does not usually come a la carte; however, in Money Judgments, you may pay for garnishment.  The bad news about garnishment is that it happens before you know it, and the good news is that you could be eligible for an exemption…but you have to claim it. Garnishment is collection of a Monetary Judgment by deducting funds from a your bank account or wages.   Normally the waiter does not warn you about garnishment—neither does anybody else.  With a Money Judgment, the opposition can file a Motion for a Writ of Garnishment, which means that at any inopportune time, they can dip into your bank account, or take a portion of your wages.  You do not get notice that it is going to happen until after it happens, then the attorney will send you an exemption form. Everybody should pay their debts; however, certain incomes are exempt to prevent a choice between paying the electric bill or buying food.  Exempt incomes include: 1. Income of head of household at a certain level 2. Social Security benefits 3. Pension 4. Disability The key to that exemption is that you have to claim it. An exemption is like your luggage going around […] Read More