A judgment has been entered against me. What happens now?

Jeffrey Daniel Larkin

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Bankruptcy Attorney

Contributor Level 15

Posted about 5 years ago. 5 helpful votes

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1

Wage Garnishment

If you are employed as a W-2 employee, a judgment creditor can attempt to garnish your wages to pay off the judgment amount. Under a wage garnishment, your employer is served an order to withhold your pay. The creditor is generally limited to 25% of gross wages per pay period. Wage garnishments are not very effective on self-employed individuals since it is difficult to force someone to withhold and turnover their own wages.

2

Bank Account Levy

If a creditor has obtained a judgment against you and knows where you bank, a bank levy can be an effective tool. Unlike a wage garnishment where your employer is served and you are provided notice, with a bank levy, you aren't notified until after the levy has already taken place. The reason is obvious. Many judgment debtors would remove the money from the account if they were notified beforehand. Additionally, wage garnishments are ongoing orders to withhold wages, whereas a levy order is a "one time shot" taking whatever is in the account at the time of the levy. Each subsequent levy requires a separate order.

3

Liens

The purpose of a lien is to secure payment by attaching or linking it to property. It is the best chance of guaranteeing payment on a judgment at some point in time. The most common example is a lien placed against real estate. The lien attaches to the real estate and collects interest at 10% per year. Once the property is sold, foreclosed or refinanced, the liens are paid off in the order they were placed against the property. If you are facing any of the above, bankruptcy can help by stopping the garnishments, reversing recent levy's, and removing existing judgment liens against your property.

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