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• If you owe money to a person or business and cannot pay, they will try to collect.
• If you bought something on credit or put up something you own as collateral, the creditor may have the right to repossess it.  Cars are often repossessed.  We use a car as an example for repossessions.
• If the creditor sues you and gets a court judgment, the creditor may have the right to garnish your wages or execute against your property.
• This information explains when a creditor can do these things and what you can do to protect your property.

Repossessions

When can someone repossess something from me?

• A creditor can repossess only if you signed an agreement making the property collateral.
• Most creditors have you sign papers allowing this when you buy a car on credit.
• A creditor cannot repossess a house or land.  Instead, it must foreclose on a mortgage or sue you in court.
• A creditor cannot come into your house without your permission to take back your possessions, even if you are behind on the bill.
• Repossessions usually involve cars and trucks.
• A creditor can repossess your automobile, but only if it can be done peacefully.
• The creditor cannot trick you into bringing your car to the shop in order to repossess it.
• The creditor cannot use any force or threats of violence to repossess it.
• However, the creditor does not need to notify you before repossessing.
• A creditor does not have to take you to court before repossessing.

Can I get my car back after it is repossessed?

• If your car is repossessed, the creditor must send you a notice of your right to redeem (get back) the car.
• Often, however, to redeem you must pay off the entire balance owed on the car, not just the amount you are behind.
• You can’t get the car back by filing bankruptcy.
• You should talk to a lawyer to find out about your rights.  The lawyer can help you decide whether to try and get the car back.

What about the things I had in the car?

• If you have anything in the car when it is repossessed, you have the right to get it back.                   
•  Go to the creditor right away to get your possessions back.
• If you can’t get your things right away, write to the creditor saying what you want returned.  Then, make arrangements to pick them up.

What happens if I don’t get my car back?

The creditor can sell it to someone else.

Do I still have to pay after my car is repossessed?

Yes.  If the creditor sells the car for less than you owe on it, you still owe money.  The creditor usually tries to collect the balance from you.

What can I do if I am sued?

• You may have defenses and counterclaims.
• if you did not get notice after the repossession
• if the creditor made an unreasonable sale
• if the contract papers did not tell you all they were supposed to tell you
• Call a lawyer right away.  You only have a short time to answer a law suit.

Garnishments

Can someone garnish me without suing me first?

• Usually not.  Except for some debts to the government, you can only be garnished
• If a creditor has sued you
• You had a chance to respond, and
• The court has entered a judgment against you.
• The IRS and some other agencies can garnish you without suing first.
• They need to send you notice first.
• They need to give you a chance to challenge the debt.
• Usually, agencies do not garnish unless other attempts to get you to pay fail.

How much of my pay check can be garnished?

• Nothing, unless your take-home pay is at least $154.50 per week.
• If your take-home pay is more than that:
• No more than 25 percent of your pay can be garnished.
• After a garnishment, you must have at least $154.50 per week left.
• If the garnishment is for child support, up to half (50%) of your wages can be garnished.
• Sometimes, child support garnishments can even take 60 percent of your wages.

How does a wage garnishment work?

• The Court sends notice of a wage garnishment to you and to your employer.
• Your employer has a month to answer and start taking out your money.
• Your employer does not have to wait the month, however.
• If you receive garnishment papers, you should see a lawyer right away.  You may be able to protect your wages from garnishment.  You also may be able to reach some agreement that will reduce the garnishment.

How can I stop a wage garnishment?

• You may be able to stop it by filing a claim of exemptions.  This only works if:
• You have very little income and very little property.
• The judgment is on a contract or some other debt that allows exemption.
• The Court will give the creditor thirteen (13) days to challenge your exemption.
• Unless you get a special order, the garnishment will keep going until the Court grants your exemption.
• You can stop it by filing a bankruptcy.
• You get the creditor to release the garnishment.
• You should talk to a lawyer about how you can protect your wages.

Can a creditor garnish anything else?

• Yes.  A creditor can serve garnishment papers on anyone who owes you money.
• Your bank account can be garnished.

What happens when my bank account gets garnished?

• First, your account is frozen.
• You can’t get at any of your money.
• If they have not already cleared, any checks that you have written bounce.
• Second, your bank pays into Court the amount you owe.  It then unfreezes your account.
• If your account does not have enough to pay the judgment in full,
• Your bank pays everything in your account.
• Your bank keeps the freeze on your account.
• If any more money comes into your account, it will pay that into Court. 

What can I do to stop the garnishment?

• You may be able to file a claim of exemptions.
• This works if all your personal property is worth less than $3,000, and the judgment is on a contract or some other debt that allows exemption.
• You can also file a claim of exemptions if all or some of the money in the account is exempt under federal law.  This includes Social Security, SSI, Veterans Benefits and Civil Service Retirement.  See Protect Your Social Security and SSI.
• You can file a bankruptcy.
• Be sure to call a lawyer right away if you receive a garnishment.

Executions

A creditor has another way to get its judgment paid: Execution.

What is an execution?

It is the legal term for an order that lets a creditor get the Sheriff to take property and sell it to pay a judgment.

How does an execution work?

• The creditor with the judgment against you files papers with the Court.
• The Sheriff comes to your house and serves you with the execution papers.
• The Sheriff will give you some time to try and reach an agreement with the creditor.
• If the creditor does not release the execution, the Sheriff will set a date to sell your property.

What can a creditor get from me?

The Sheriff can take anything that you own.

How can I stop an execution? 

• You may be able to stop it by filing a claim of exemptions.  A claim of personal property exemption works if:
• You have less than $3000 worth of property.  If you owe money on something, you can subtract that from its value.
• The judgment is on a contract or some other debt that allows exemption.
• If the execution is on your house and land, you can stop it by filing a claim of homestead exemption.
• This stops the execution if your equity is less than $5000.
• If the judgment is against you and your spouse, you can protect up to $10,000.
• Even if your equity is too high to protect in full, it is important to claim your exemption.  Otherwise, you lose it.
• You can stop the execution by filing a bankruptcy.
• You get the creditor to release the execution.  Most will not unless you pay at least half the judgment.
• You should talk to a lawyer about how you can protect your property.