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Tesla2016

"Judgment preference" ?

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I was reading old threads regarding settlement, and came across this intriguing post by 'Seadragon' 

Seadragon wrote:

"So If you fight in court and they get a judgment then that judgment has prefference and no one else can collect on a judgment until the first one is done.

Summing up Bk they all get a small piece of pie for 5 years. Litigation the would all have to stand in a LONG line and wait due to judgment preference."

 

Is it true that no one else can collect on a judgment until the first one is done (i.e., paid-off)?  Is there such a thing as "judgment preference"?  I googled the term, but came up empty.  Could it be that this exists only in some states?

 

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23 minutes ago, Tesla2016 said:

Is it true that no one else can collect on a judgment until the first one is done (i.e., paid-off)?  Is there such a thing as "judgment preference"?  I googled the term, but came up empty.  Could it be that this exists only in some states?

What SeaDragon said and what they meant are two different things.  If Bob has 3 judgments against him A for $3000, B for $2000, and C for $10,000 if creditor B gets a garnishment order first then the other 2 creditors will have to wait until creditor B garnishment ends.  Creditor A doesn't get to collect first simply because they got a judgment first and others don't have to wait in line based on when they got a judgment either. State and Federal law cap garnishment at 25% of your net income.   Some states have laws that if a garnishment would put a consumer's wages at or below the poverty level then they cannot be garnished.  Some also have laws to exempt head of household though those states are few and far between.

It isn't that there is a judgment "preference" as much as a priority.  He who gets to the paycheck first gets paid first.  What the other creditors CAN do is levy the bank account once the money is deposited because it is no longer a paycheck it is just money.  A payroll garnishment seizes it before it ever gets to the consumer.  Levying a bank account bypasses that 25% cap on the paycheck garnishment.  They can levy up to 100% of the judgment amount from your bank account.

The 25% cap saves many a consumer whose paycheck is already got a garnishment for their child support (not because they have arrears but because many states require it be paid this way) and will be paying support for another decade or more which means creditors cannot garnish their checks until child support ends.

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