HOA Financial Matters: When Garnishment Works in Collections

October 9, 2009
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You might think that once you successfully sue a resident for money owed to your HOA or condo association that the hard work is over. But trying to get paid after winning the judgment is often where the truly hard work begins!

For a new article we spoke to experts and compiled 6 ways you can turn your HOA's official judgment into money in your association's bank account. This week's tip explores just one of those 6 tips: garnishing wages.

"Once you have a judgment, the most typical way to collect is through garnishment," says Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm PC in Phoenix, which represents associations. "You can garnish wages and bank accounts, and we're seeing that if the debtor has a rental in the association, you can garnish the rent."

Garnishment is especially helpful when owners have been foreclosed on or have walked away from their property but are still employed. "A lot of collecting on a judgment is based on each state's laws, which have provisions governing garnishment of wages, accounts, and seizure of property," says Elizabeth White, a shareholder and head of the community associations practice at the law firm of LeClairRyan in Williamsburg, Va.

"If you get a lien against the property, that lien may be wiped out with foreclosure. But if the party has a job or income from another source, you have the ability to garnish that money by following your state's law. There are exemptions and limitations depending on how much the judgment is for and how much you can garnish. Typically, you can garnish only a certain percentage of a debtor's income per month. But the judgment is going to follow the individual person."

Unfortunately, in some states garnishment isn't an option. So as usual, you need to check your state and local laws to find out if garnishment is an option for you.

To read more about how to get paid after your HOA recieves a court judgment, see our new article.

Best regards,
Matt Humphrey

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