10 Steps in the Legal Process of Obtaining a Property Garnishment
Property garnishment is a legal process that allows a creditor to collect a debt by seizing property or assets of the debtor. Garnishment can be initiated to help satisfy outstanding financial obligations when other methods of collection, such as direct payment or settlement negotiations, have failed.
The process of obtaining a property garnishment involves several steps, each requiring precise adherence to legal procedures. As a Maryland property garnishment lawyer, I have extensive experience assisting clients with this process. I’ll break down the steps involved in obtaining a property garnishment in Maryland.
Determine if Garnishment Is an Option
Before pursuing a property garnishment in Maryland, it’s crucial to assess whether garnishment is a viable option.
Garnishment is typically sought when a debtor has assets or property that can be seized to satisfy a debt. The creditor must first obtain a judgment against the debtor, meaning that the creditor has won a legal decision from a court establishing that the debtor owes money.
In Maryland, property garnishment can be used to seize non-exempt property, such as bank accounts or personal property. However, some property is exempt from garnishment under Maryland law, including certain personal items (e.g., household goods) and retirement accounts (e.g., IRAs and pensions).
If the debtor’s property is exempt, garnishment may not be possible. Therefore, before proceeding, the creditor needs to determine whether the debtor has non-exempt assets available for garnishment.
Obtain a Judgment
The next step in the process is to obtain a court judgment against the debtor.
A judgment is a court order that formally recognizes that the debtor owes money to the creditor. To do this, the creditor must file a lawsuit in the appropriate Maryland court. The court will then schedule a hearing, where both the creditor and debtor will have the opportunity to present evidence and arguments.
If the debtor fails to appear or respond to the lawsuit, the court may enter a default judgment in favor of the creditor. If the debtor contests the lawsuit, the case will proceed to trial, and the judge will issue a judgment based on the evidence presented.
Once the creditor obtains a judgment, they have legal authority to collect the debt using various methods, including garnishment.
Identify the Debtor’s Non-Exempt Property
To begin the garnishment process, the creditor must first identify the debtor's property that isn’t exempt from garnishment under Maryland law. This can include tangible personal property, real estate, or even funds held in a bank account.
Identifying non-exempt property can be a challenging task. Often, creditors will have to conduct investigations to locate assets. This could involve reviewing public records (e.g., land deeds or business registrations) or seeking the debtor’s financial information through legal discovery methods.
Creditors may also use asset searches, hiring professional investigators or using online tools to find information about the debtor’s assets. In some cases, creditors may file a motion with the court to compel the debtor to provide information about their assets or submit to questioning under oath.
File a Garnishment Petition With the Court
Once non-exempt property has been identified, the creditor must file a garnishment petition with the court that issued the judgment. In Maryland, creditors can file either a “Writ of Garnishment” or a “Request for Garnishment” with the court. This petition requests the court’s authorization to garnish the debtor’s property.
The petition must contain several key elements, including:
Information about the creditor and debtor: The creditor must provide basic identifying information for both themselves and the debtor, including names, addresses, and any other relevant details.
Details of the judgment: The creditor must specify the amount owed under the judgment, including any interest, court costs, or other applicable fees.
Identification of the property to be garnished: The creditor must identify the specific property or assets that they wish to garnish, such as a bank account or personal property.
Once the petition is filed, the court will review it and determine whether to issue a garnishment order. If the court grants the petition, the creditor will receive a "Writ of Garnishment" or another official document allowing them to proceed with garnishment.
Serve the Garnishment Order on the Debtor and Third Party
After receiving the garnishment order, the creditor must have it served on both the debtor and any third parties who may be in possession of the debtor’s property.
For example, if the creditor is garnishing a bank account, the creditor must serve the garnishment order on the bank. If the creditor is garnishing personal property, the order must be served on the individual or business holding the property.
In Maryland, garnishment orders are typically served by a sheriff, process server, or another authorized person. The garnishment order will notify the third party of the creditor’s intent to seize the debtor’s property. It will also instruct the third party to either freeze the debtor’s account or hold the property until the court further instructs them.
It’s important that the creditor properly serves the garnishment order, as failure to do so could invalidate the garnishment.
Wait for the Response from the Garnishee (Third Party)
Once the garnishment order is served on the third party, they must respond within a specified period. In Maryland, the garnishee typically has 30 days to respond. The third party’s response will indicate whether they hold any property belonging to the debtor and, if so, how much. In the case of a bank account garnishment, the bank will report the balance of the account.
If the third party doesn’t have property belonging to the debtor, they’ll notify the court that no garnishable assets were found. If the third party does hold property, they’ll either freeze the account or hold the assets until further court orders are given.
The debtor also has the right to object to the garnishment within 30 days. The debtor may argue that the property is exempt from garnishment or that the amount being garnished exceeds the judgment amount. If the debtor files an objection, a hearing may be scheduled where both parties can present their case.
Attend a Court Hearing (If Necessary)
If the debtor files an objection to the garnishment or there’s a dispute over the garnished property, the court may schedule a hearing. At this hearing, both the creditor and debtor will have an opportunity to present evidence and make arguments.
The court will decide whether the garnishment should proceed and whether any property should be exempted from the process. If the debtor’s objections are overruled, the garnishment will continue. If the debtor’s objections are upheld, the court may modify or cancel the garnishment order.
Seize the Property
If the court rules in favor of the creditor and no further objections or disputes remain, the creditor can proceed with seizing the property. The garnishee (third party) will turn over the garnished property to the creditor, such as releasing the funds from the debtor’s bank account.
The creditor will then apply the funds or assets received from the garnishment to satisfy the judgment, including any associated interest or fees. In the case of non-cash property, the creditor may choose to sell or auction the property to recover the owed amount.
Distribute the Garnished Funds
Once the creditor receives the garnished funds or assets, they must distribute the amount in accordance with the judgment. This includes paying off the debt and covering any court costs or attorney’s fees that may have been incurred during the process.
If the garnishment only partially satisfies the debt, the creditor may pursue additional garnishments or collection actions until the full amount is recovered. If the debtor’s debt is fully paid off, the creditor must file a satisfaction of judgment with the court to officially close the case.
Handle Post-Garnishment Actions
In some cases, garnishment may not completely satisfy the judgment, especially if the debtor has limited assets. After garnishment, the creditor may need to consider additional steps, such as filing a lien on the debtor’s property or continuing to monitor the debtor’s financial situation for further garnishment opportunities.
Creditors should be aware that Maryland law provides certain protections for debtors, and they may still have options to challenge garnishments. If the debtor files for bankruptcy, for example, the garnishment process may be temporarily or permanently halted. It’s essential to consult an attorney to work through these complications and make sure that all legal requirements are met.
Contact a Debt Collection Defense Attorney for Assistance
By understanding the legal steps involved and working with an experienced attorney, creditors can effectively utilize property garnishment as a tool for recovering owed debts.
At William Ray Ford Attorney at Law, I help individuals in Calvert County, Prince George’s County, Anne Arundel, Montgomery County, Howard County, Frederick County, and Queen Anne’s County pursue garnishments. Contact me today to learn more about how I can assist you.