Once you have been sued and a judgment has been entered, then the creditor can attempt to collect on the judgment. A creditor can collect on a judgment by garnishing wages and bank accounts and by levying property.
A wage garnishment requires your employer to deduct money from your paycheck. The money is sent to the Clerk of Court which disburses it to the creditor.
A wage garnishment is subject to exemptions. The head of family exemption allows one to exempt weekly disposable earnings up to $750. Disposable earnings in excess of $750 a week are exempt unless you agreed otherwise in writing.
A bank account garnishment requires your bank to freeze your account. The bank account money is sent to the Clerk of Court which disburses it to the creditor.
A bank account garnishment also is subject to exemptions. Wages deposited into a bank account remain exempt under the head of family exemption for six months. However, the money must be traceable to wages in order to be exempt.
A bank account garnishment also is subject to Tenancy by Entirety (TBE) immunity. A bank account held TBE cannot be used to satisfy a debt owed by only one spouse.
However, the proper exemption or TBE immunity must be claimed in order to stop or limit the garnishment.
Both Chapter 7 and 13 Bankruptcy can stop a creditor from attempting to garnish wages and bank accounts. In addition, judgment liens may be avoided to the extent they impair an exemption. Lastly, Bankruptcy will discharge the personal liability for the debt that had been reduced to judgment (subject to a few exceptions).
Brent M. Myer
Attorney at Law
https://treasurecoastbankruptcy.com
