The Biblical quotation has nothing to do with the topic, but it sounds cool. Judgments, by that I mean the kind of court judgment, are court orders creditors take against an unresponsive debtor who largely ignored all the warning signs. Creditors, collection agencies, and collection attorneys will usually make dozens of contacts by phone and letter, so there’s no mistaking they want a payment, and they ultimately will file a lawsuit and take a judgment. The wakeup call is when the creditor uses the judgment to take part of your paycheck, an act called garnishment, or the car is picked up by the Sheriff’s Department, or the checking account is cleaned out by a levy. There are some collection attorneys in Tennessee that even brag about levying on family pets and household furnishings.
In Tennessee, most lawsuits begin with what is called a Civil Warrant, and it is filed in General Sessions Court. That is the court of least jurisdiction in Tennessee, which can be misleading because the court has jurisdiction up to $25,000, and all the rules of evidence apply. The term Civil Warrant is a little misleading, too, because of the word “warrant”. I’ve had clients call in a total panic because a Sheriff’s Deputy was trying to serve a warrant, and the client was convinced they were going to jail. The civil warrant is a one page document, front and back, and the operative word here is “civil”. A civil action mostly involves no jail time, except in rare circumstances. The creditor is working toward a judgment so they can levy on property, or better yet, garnish your paycheck.
The average person will ignore the Civil Warrant, and the vast majority of cases in General Sessions Court go down as default judgments. And that’s where it gets interesting for the consumer. Some people will contact the collection attorney and attempt to work out a payment plan, which isn’t a bad idea if you cannot pay in full. You can also file a slow-pay motion after a judgment that may allow for a payment arrangement through the court. Most contracts allow for attorney fees and costs, and the standard for attorney fees allowed in middle Tennessee is the addition of one-third of the judgment. By statute, judgments also collect interest, and if paid through the court, the clerk will assess collection costs and fees. The $1000 debt quickly becomes $1400, $1500, or more.
A creditor must generally have a judgment before they can garnish a check or levy on property. Judgment creditors can take up to 25% of your wage on a garnishment, and in theory you could get hit by an administrative wage garnishment at the same time! The only exceptions to the judgment required rule are for student loans and the IRS, which are called administrative wage garnishments and do not require court action, and they can take 15% of your gross wage.
A bankruptcy stops a garnishment or an administrative wage garnishment dead in its tracks. Bankruptcy also stops attempts to seize your car, your bank account, or other property. That’s where we can help. If timely filed, a bankruptcy may also permit you to recover some of the money previously taken by garnishment.
Call us TODAY for a no cost, no obligation consultation. You can set up a time by calling (615)386-0075. At this meeting you will learn how bankruptcy may influence your situation.
Leave a Reply