Without Wage Garnishment, Are Collections Judgments a Concern?
North Carolina is one of the few states that does not generally permit wage garnishment as a means to collect debts. Things like child support, taxes, and defaulted student loans are sometimes collected by garnishment, so it should be emphasized that wage garnishment does exist, it's just not broadly available. A creditor attempting to collect a credit account or a medical bill would not have wage garnishment as a standard remedy in North Carolina. This is in decided contrast to many states, where wage garnishment is a very popular way to collect such debts.
There is a risk that the absence of wage garnishment may cause a person to under-appreciate the seriousness of a judgment in North Carolina. Any time you have been named as a defendant in a lawsuit, a judgment will follow in the normal course absent your successful defense of the suit. With a judgment, a creditor may seek payment from garnishing bank accounts, sale of property, or the leverage of a judgment lien on real estate. Judgments last for 10 years, with the prospect of renewal. Exemptions are available to protect your property in North Carolina, but need to be affirmatively asserted. An aggressive judgment creditor can keep a person jumping through hoops to keep his or her property for years, or force the person to turn to bankruptcy.
While collections defendants in North Carolina can take comfort that their paycheck is not under direct attack, they should not discount the prospect of other post-judgment collections. The time to assert a defense to the creditor's claims is early in the lawsuit. Once a judgment is entered, a debtor-defendent has more limited options to contest the collection. We are available to consult with collections defendants on their potential strategies to defend a lawsuit.
If a creditor has threatened wage garnishment in a context where wage garnishment is not allowed under the law, this may potentially be a violation of the Fair Debt Collections Practices Act or of state law. Documentation is the often the key to enforcing a consumer's rights in these regards, so persons falsely threatened with wage garnishment should keep detailed records.