Debtor's Rights

In these tough economic times it hard for many North Georgians to pay their bills. Unfortunately creditors are not very understanding and the incessant dunning can be very unnerving at best and creates much stress in the household. However when the creditors turn to filling law suits, it can only ratchet up the problems. When creditors start to take legal action they are taking collections to a whole new level that that results in draconian measures to extract the money from the debtor. Debtors who know their rights can protect themselves from the aggressive tactics used by collections agencies and their attorneys.

 

Collections agencies are known for their aggressive tactics. The constant calling and degrading attitude of bill collectors is a hallmark of the trade. Collectors have one aim and that is to get the debtor on the phone to get a payment and they will do or say anything to accomplish that end. One tactic is to threaten repossession, repossession and foreclosure. When collections agencies turn the accounts over to their lawyers, they are just as aggressive and they have one aim, to collect money. Collectors and their lawyers know very well that debtors have rights, but they will push the envelope on those rights to see what they can get away with.

 

The fact is that there are guidelines that creditors must follow on in all of their actions. Bill collectors are subject to the Federal regulations of the Fair Debt Collection Act which sets boundaries for the collectors and very stiff penalties if they cross those lines. There are also Georgia and Federal laws that govern the process of repossession and foreclosure. The law includes notice requirement and certain steps that a creditor must take to protect the debtor’s interest in the property. While creditors will try to take every short cut they can get away with, the knowledgeable debtor can use the process to work with creditors to create a mutually beneficial outcome.

 

When the creditors turn around and sue the debtors there are still rights that every debtor enjoys under the due process of law guaranteed by the Constitution. Creditors that can successfully bring a law suit to judgment can collect money from debtors by garnishing wages and bank accounts as well as levying on property and personal possessions. They may even be able to collect their attorneys fees for the trouble of collection. However the creditors have to be able to prove their case in court with legally admissible evidence. The truth is that many creditors do not have the evidence they need to prove their case.

 

The greatest tool that collectors and their lawyers have is fear and hopelessness. Out of despair, many believe that since they owe money that there is nothing they can do. The biggest mistake many debtors make is to ignore the collectors until it is too late. One of the hardest things in the law is to undo a court order. When a debtor receives a garnishment notice, it may be too late to take steps to their rights. A debtor educated on their rights is proactive and takes steps insure that they are not preyed upon by the collectors.

 

While a letter threatening legal action is not a lawsuit, when a debtors are served with a summons, they needs to take action. The worst thing to do it to throw the papers in the trash out of despair. In Georgia, if a summons has not been answered in forty-five days, the matter is in default and a judgment will issue, even if the debtor never really owed the money. A debtor that finds them self facing a lawsuit should contact a lawyer. While it may not be affordable to hire a lawyer for the case, the lawyer can answer questions and give advise on how to handle the case. For the price of a small consultation fee, many lawyers will coach a debtor through answering the suit and presenting the case in the courtroom. There are many websites and even workshops available to help debtors understand their rights.

 

Facing creditors can be stressful and frightening situation, debtors need to know their rights. Taking the time to learn the rights and protections available to all debtors under the law is time well invested. A debtor that knows their rights can level the playing field and protect their family from the misfortunes of the bad economy.

 

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Changes to the Garnishment Laws: Corporations Need Not Answer Through A Lawyer

On Feb. 7, Gov. Nathan Deal signed HB 683 in to law, effectively eliminating the requirement that corporations have a lawyer represent them to answer a garnishment.

This new law is lauded as removing an unnecessary regulation on business. While this change to the law does help cut some amount of bureaucracy and expense for business, but it is not without some pitfalls. A garnishment is a legal proceeding and if it not handled properly can come with some very expensive consequences for business.

Garnishments are a routine part of operating a business. It is a legal process that allows a creditor who has received a judgment in a court to have the money taken from that person’s wages or bank accounts. Employers and banks respond to garnishment proceeding for creditors collecting from their employees and customers as a part on a regular basis. Most of the information required for a response to a garnishment is administrative in nature, such as payroll information and account balances. These tasks can and in the past have been handled by bookkeeper or payroll clerk. In fact, this is how most businesses have handled garnishments in Georgia up until 2011.

On Sept. 12, 2011, the Supreme Court of Georgia approved a formal advisory opinion of the State Bar of Georgia's Unauthorized Practice of Law Committee that interpreted the current law, as it is written, to prohibit non-lawyers from answering garnishments on behalf of corporations. This ruling had a profound effect on employers and banks that are most likely to answer garnishments. Justice David Nahmias, following the recommendations of the State Bar of Georgia on the issue, recommended that those interested should seek to modify either current Georgia State Law or the Court Rules.

HB 683 did just that, giving clerical workers and agents the authority to file a garnishment on behalf of the corporate entity. While this comes as a great relief and savings to business, garnishments should not be seen as just routine paperwork. A garnishment is a legal proceeding pending in a court, and as such, as procedures that must be followed. Failure to follow those procedures and meet the specific deadlines can result in the creditor taking a judgment against the employer or the bank for the amount owed to the creditor. This could have the effect of the employer or the bank taking the place of the original debtor. While there are some provisions in the law that give the corporation some relief, those measures are time sensitive and procedurally driven and may cost the creditor out of pocket as well.

The law allows for an employer or bank to deduct up to $50 for legal fees to answer a garnishment. While this probably will not cover the cost of hiring an attorney to answer the garnishment, it may cover the cost of getting some sound legal advice to make sure the garnishment is answered correctly.