HOA Financial Matters: When Garnishment Works in Collections
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:
"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.