Attempted Garnishment after Satisfaction of Judgment: A Case Study
In one matter, our client wasn't sued twice but was garnished twice, which also happens. Originally, he hadn't been served properly, which led to a default judgment. The creditor got paid fully via wage garnishment. Our client acknowledged to owing the debt and did not want to contest the garnishment. He fully extinguished the judgment by fully paying it off.
Fast-forward three years. The same consumer received another Notice of Garnishment from the same debt. But this time, it was being handled by a different law firm.
The consumer was baffled to receive the new Notice of Garnishment by the same creditor for an amount within $200 of the first judgment balance.
Thankfully, we were able to work it out with nice results swiftly. Being pursued twice for the same debt violates city, state, and federal law.
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Two Judgments for One Debt: How it Happened & What to Do
It's generally not permissible for a creditor to obtain two judgments against a debtor for the same debt. However, due to errors in the collection process, such as lost paperwork or database discrepancies, a debtor might face two lawsuits for the same account.
Creditor mistake & good legal defense:
- Mistakes like a creditor accidentally forwarding the same account to two law firms can result in dual lawsuits. If left unaddressed, the court could issue two default judgments for the same debt.
- The legal defense "Res Judicata," meaning "the issue has been decided," prevents a new case from being brought up for the same cause of action. If faced with a duplicate lawsuit, it's crucial to consult an attorney and possibly file a motion to vacate the subsequent judgment.
What New Yorkers Should Know When Dealing with Creditors
In New York, creditors (or people working for them) can't:
- Tell your employer about your debt before they win a court case against you.
- Threaten to do something they usually wouldn't or can't do.
- Try to charge you extra fees on top of what you owe.
- Make it seem like they're part of the legal system or a government agency.
- Bother you or your family too often or at strange hours.
Five Steps to Take if You've Been Sued for the Same Debt Twice
Gather All Relevant Documentation: Collect any and all records related to the debt, including previous settlement agreements, payment receipts, court judgments, and any correspondence with the creditor or collection agencies.
Consult a Debt Defense Attorney: Seek legal counsel from an attorney who specializes in debt collection defense in New York. They can provide guidance tailored to your situation and help you understand your rights and options.
File a Motion to Dismiss: If the lawsuit is indeed redundant, your attorney can assist you in filing a motion to dismiss the second lawsuit based on the prior judgment or settlement, preventing further legal action on the same debt.
Report the Violation: Being pursued twice for the same debt is a violation of city, state, and federal laws. Report the violation to appropriate agencies, such as the New York State Attorney General's office or the Consumer Financial Protection Bureau, to ensure the creditor or collection agency is held accountable.
Maintain Communication Records: Ensure you document all communication with the creditor, their attorneys, or collection agencies. This can be crucial evidence if you decide to take legal action or if the case progresses further. Always ask for written confirmations and avoid making any verbal agreements without them being documented.
From Lawsuit to Garnishment: 3 Points to Know
- If faced with a debt collection lawsuit, ensure you respond personally or through an attorney to safeguard your rights by the specified date.
- Debt collectors can garnish your paycheck or bank account, but they first need a court order. Always address lawsuits promptly to defend against such orders.
- While many federal benefits are protected from garnishments, there are exceptions like delinquent taxes, child/spousal support, or student loans. Familiar benefits that generally can't be garnished include Social Security, Veterans benefits, and Federal student aid.
Dealing with Aged Debts: The "Statute of Limitations"
- Although debts don't typically vanish, there's a limited time for collectors to sue you, known as the "statute of limitations." Once this period expires, the debt becomes "time-barred."
- The length of the statute of limitations varies depending on the debt type and relevant state laws. In some states, acknowledging or making a payment can reset this timer.
- While it's illegal for collectors to sue over a time-barred debt, they might still contact you, depending on state regulations. If you want them to stop, send a written request and consider using certified mail for record-keeping.
For a list of 50 other types of debt-collection violations, click the below image:
If you find yourself in a similar situation, call The Langel Firm today at (888) 271-7109 or complete this intake form.