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‘TIS THE SEASON TO BE WARY OF OUTSTANDING JUDGMENTS

Consumers are routinely recommended to check their credit, and not just to evaluate their scores. The information that is listed on your credit report will be the first resource used by a potential lender in evaluating a consumer’s credit. In reviewing their credit reports, some consumers may realize that a judgment has been asserted against them by one of their creditors. However, because of the age of some of the judgments, and the lack of communication since the judgment was obtained, they do not feel the need to take any action.

Under Georgia law, a judgment lien last for seven years. However, it can be renewed for an additional seven years as long as the renewal is filed before the original seven year period lapses. So essentially, a judgment in Georgia will remain collectible for as long as 14 years. Many times, the failure of a judgment creditor to promptly enforce the judgment gives the consumer a false sense of security. But the delay may be because the judgment creditor is looking for the best opportunity in which to enforce its judgment.

There are several ways in which a judgment creditor can collect upon its judgment. A judgment on a debt constitutes a lien on any real estate owned by a consumer. However, many consumers may not own land, so this avenue of collection is not available to their judgment creditor. A judgment creditor may also seek to garnish the consumer’s wages. But if the consumer has moved, relocated, or frequently changed employment, it can be very difficult for a judgment creditor to obtain a wage garnishment. Additionally, the judgment creditor is limited to collecting 25% of the consumer’s after – tax income. As a result, the preferred method for enforcing a judgment against a consumer is to freeze their bank accounts first. While a judgment creditor only received 25% of the debtor’s after – tax income through a wage garnishment, they will essentially receive 100% of the debtor’s after – tax income if they freeze her bank account, as most consumers have their pay directly deposited into their bank accounts. So the preferred method is for the judgment creditor to freeze the bank account first, and then after those funds are obtained, seek a wage garnishment.

Especially problematic is that a bank account garnishment will allow for the seizure of any deposit accounts to which the debtor has access. So if a debtor is a signatory on an account with their spouse or parents, the entire account can be frozen, even if none of the funds were deposited by the judgment debtor. While steps can be taken by the innocent parties to recover the funds on deposit, it can be costly and time-consuming. The judgment creditor is going to seek to freeze the account at a time when the most money will be available in the account. It is not uncommon for some individuals to receive bonuses at the end of the year. Likewise, many consumers will file for their income tax refund as soon as possible, and that money will be directly deposited into their account. As a result, the prospect of a bank account garnishment on a judgment increases during this time of the year. While a bankruptcy filing will stop the garnishment, and usually lead to the recovery of the funds, it will not prevent ongoing drafts and debits from being cancelled while the account is under judgment seizure. Likewise, a bankruptcy filing will not prevent the return of checks for insufficient funds that were tendered while the account was frozen.

Just because a judgment has lain dormant on your credit for a period of years does not mean that you are immune from collection on that judgment. Many times the judgment creditor is simply waiting for the best opportunity to maximize their recovery. Additionally, these judgment creditors also recognize that many people will immediately seek the help of a bankruptcy professional once their wages are garnished or bank account is frozen. So if they only have one attempt to collect their money, they are going to try to do it at a time when there are ample funds in the debtor’s deposit accounts.

If you know that you have judgments against you, you should definitely contact a bankruptcy attorney. You are not required to be provided advance notice of a garnishment or bank account seizure, so it will not be discovered until it is too late. There are many bankruptcy attorneys in the CSRA who offer a free consultation, and if you have been sued on a debt, and have a judgment against you, it would be a good idea to meet with one of them before you are denied access to your accounts.