How Do Late Fees Work in Judgments and Garnishments?

Question from ben, How Do Late Fees Work in Judgments and Garnishments?

Answer from AI:

When dealing with legal financial obligations such as judgments and garnishments, understanding how late fees are applied and what options are available for collection is important. Here’s a general overview of these concepts:

Late Fees and Judgments

Late fees are additional charges that a creditor can impose on a debtor for not paying a debt on time. Whether late fees can be added to a judgment depends on several factors:

• The original contract or agreement between the parties: If the contract allows for late fees, and the creditor included those fees in the original lawsuit, they may be included in the judgment.
• State laws: Some states have specific statutes that govern the imposition of late fees and how they are to be calculated and applied.
• Court discretion: A judge may have the discretion to include or exclude late fees when entering a judgment.

If late fees are included in the judgment, they become part of the total judgment amount. If they are not included, they cannot be added later without going back to court.

Garnishment for Collection of Judgments

Garnishment is a legal process through which a creditor can collect money from a debtor’s wages, bank account, or other assets to satisfy a judgment. When deciding how to proceed with garnishment, the creditor typically has a few options:

First Option: Garnishing Wages or Salary

This is often the first choice for creditors because it provides a steady stream of payments directly from the debtor’s employer. The amount that can be garnished from wages is subject to federal and state laws that limit the percentage of disposable income that can be taken.

Second Option: Garnishing Other Assets

If wages are not sufficient or available for garnishment, creditors may choose to garnish other assets such as bank accounts or property. This option requires the creditor to identify specific assets that can be used to satisfy the judgment.

Completing a Summons for Garnishment

When completing a summons for garnishment, it is crucial to follow the instructions carefully and check the appropriate boxes that apply to your case. The options you select should reflect the type of garnishment you are seeking (wages, bank accounts, etc.) and comply with the jurisdiction’s rules.

If you are unsure about which boxes to check, it is advisable to consult with a legal professional or refer to the court’s instructions for guidance. Legal advice is necessary to ensure that you are proceeding correctly and not violating any laws or rights of the debtor.

Consulting a Legal Professional

It is important to note that this information is general in nature and may not apply to all situations. Laws and regulations regarding judgments, late fees, and garnishments vary by state and can be complex. If you are considering adding late fees to a judgment or initiating garnishment proceedings, it is highly recommended that you consult with a legal professional who can provide personalized advice based on the specifics of your case.

Remember, legal professionals can help you understand your rights and obligations, navigate the legal system, and ensure that you are taking the correct steps to collect a debt legally and effectively.