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Can judgment creditor attach personal default judgment on my single member LLC and freeze my bank account and garnish my wages?

Portland, OR |

I filed an answer to a complaint filed by a lawyer on credit card default, and it was done correctly by denying each numbered paragraph and made few affirmative defenses like lack of privity, statute of fraud, etc. The judge issued a default judgment and now the judgment creditor is pursuing my single member LLC. I do have couple of thousand dollars in the bank account from wages. This judgment creditor is very sneak and lies about notifying me, when he didn't. Can he freeze my BUSINESS checking account where I can't withdraw my money? I understand he can freeze my PERSONAL checking account, but can he attach to my security in the LLC and garnish wages and cash?

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Attorney answers 1


Overall, it seems that it would be worth your time to seek a consultation with a local creditor/debtor attorney who can help you assess your situation.

First, if you think that the court made a mistake when it entered a default judgment against you, there is a way to ask the court to back out that judgment and give you an opportunity to dispute the creditor's complaint. You should have a lawyer help you look at this issue, however, because it is not an easy one.

Second, while it is technically true that a judgment against you does not give the judgment creditor the right to attach the bank account of the LLC, in practice it is not that simple. If you are a signor on the account, then I have seen banks wrongfully take money out of a business account and give it to the creditor. This leaves you having to go to court and fight to get that money back. Also, there are ways that a creditor can seek to attach your interests in the LLC - in essence any money that would go to you out of the LLC would then have to go to the creditor.

If this debt is a large one, and/or it is a serious risk to your business/livelihood, then go talk with a creditor/debtor attorney.

Good luck.

Christopher L Cauble

Christopher L Cauble


..It depends on who or what the judgment is against. If the judgment is against the LLC, then he can garnish bank accounts or any other people that owe your LLC money, such as account receivables, etc. You would get a copy of the writ of garnishment and you would have the right to file statutory "exemptions" in some cases. Since it is an LLC, there are far fewer exemptions available by law. If you are not the individual judgment creditor, then you are correct that he cannot go after your individual assets. However, depending on the size of the debt, he can make it difficult for you to keep your LLC properly capitalized to pay yourself. He will also be able to order you to appear to judgment debtor exams where you will be require to disclose where the LLC's assets are located, including where the equipment is located, where the account receivables are located, ect. In some circumstances..while it is rare, he can even force the LLC into liquidation. I would recommend that you hire a lawyer to deal with this situation. It appears that you are far beyond the ability to deal with this situation on your own.

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