Ask Me Help Desk - Judgement for Debt

In 2004 my salary was garnished for an $8800.00 judgement. According to my employers records as of May, 2007, I only owed $27.00, which we sent in. The collection agency said that I still owed $1500.00 interest, and my employer refused to send any more funds because the judgement amount only showed that I owed them $8800.00. In the three years that we had been paying this judgement, we never received a statement or was told that interest would be charged. Therefore, my employer did not send any more payments.

Now we received a letter from the lawyer with the same garnishment papers, the same case number from 2004 ( which is online as closed and has not been reopened or updated). The garnishment amount has been changed on the papers we received recently, and they added a court fee. It just seems fishy that the paperwork and case number are identical, but the dollar amount is changed.

It seems to me that if they have been charging interest, I should have been notified, and I feel this is never going to go away if they continue to add on interest. I have also been told that they cannot charge interest on interest, and the original debt had interest and late fees as part of the amount. The letter from the lawyer stated that Wisconsin State Law allows them to charge me this interest. What should I do?

You should talk to a lawyer yourself, if you can't afford one, try legal aid society. At the least check with the court clerk from the court that passed the judgement.

Hello michael:

I think you're right. I think they made a mistake and are trying to bluff you/your employer into making these additional payments.

The garnishment order is for your employer. Therefore, if your employer feels confident that he DID in fact comply with the garnishment order he was presented (and I think he did), then he/you should stand his ground. If he/you wishes, he could certainly respond to the lawyer with a comment similar to the one I made. Or they/you could just ignore him.

IF the judgment creditor thinks he has a case, he'll have to go back to the original court and make a motion there. From your description of his documents, he didn't do that. IF he does do all that (and I doubt he will), you will need to defend your actions.

IF you win, and I think you will, you could ask the court to award YOUR attorney's fees, and I believe the court would grant the request.

excon

In Ontario where we practice a Notice of Garnishment is usually a snapshot of the debt at the time when the garnishment papers were filed. Thereafter, post-judgment interest will continue to accrue and as such any payments you make will first be applied to running interest and then to the principal amount owing on a diminishing monthly balance.

Many creditors don't both re-issuing another garnishment to capture the remaining balance after the initial one is satisfied but they are certainly entitled to.

If another garnishment is issued additional costs will attach.

Quote:

Originally Posted by michaelz

In 2004 my salary was garnished for an $8800.00 judgement. According to my employers records as of May, 2007, I only owed $27.00, which we sent in. The collection agency said that I still owed $1500.00 interest, and my employer refused to send any more funds because the judgement amount only showed that I owed them $8800.00. In the three years that we had been paying this judgement, we never recieved a statement or was told that interest would be charged. Therefore, my employer did not send any more payments.

Now we received a letter from the lawyer with the exact same garnishment papers, the exact same case number from 2004 ( which is online as closed and has not been reopened or updated). The garnishment amount has been changed on the papers we received recently, and they added a court fee. It just seems fishy that the paperwork and case number are identical, but the dollar amount is changed.

It seems to me that if they have been charging interest, I should have been notified, and I feel this is never going to go away if they continue to add on interest. I have also been told that they cannot charge interest on interest, and the original debt had interest and late fees as part of the amount. The letter from the lawyer stated that Wisconsin State Law allows them to charge me this interest. What should I do?

I think you have to look at the Court documents in order to determine whether continuing interest was ordered or not. I've seen Judgments written both ways but usually after the garnishment is filed and paid the creditor doesn't bother going back for the running interest.

This could go on forever if interest continues to run - you'll be paying interest on the interest.

I would see what was ordered. If your employer has received the Notice he is required to continue sending the payments in and cannot simply decide this is not legal and fail to obey.