What State's Laws Apply to Judgment Collections and Wage Garnishment

[Denise1123]

My question involves collection proceedings in the State of: Virginia

If a judgment was placed for an unpaid auto debt in a Virginia court in 1996, but the debtor now lives in West Virginia, which laws apply - WV or VA? Is it the state where the debt was incurred, or the state the debtor now resides? The statute of limitations for judgments is 20 years in Virginia but only 10 in WV. 2nd part of the question: Can a West Virginia circuit court order garnishment of wages of someone who resides in West Virginia?

[jk]

the sol for the judgement is based on the state it was issued. That would mean the judgement (by your statement) would be valid until 2016 (is it renewable by chance? many states do allow a renewal). This is not a sol in the same way that there is an sol on the right to sue for a debt. This is simply a time the judgment is valid.

: Can a West Virginia circuit court order garnishment of wages of someone who resides in West Virginia?

not sure what you are asking here. It seems too simple of a question. The answer would be; yes, a WV court can order a garnishment of a persons wages in WV. If you mean pursuant to the judgment in Virginia, the answer isn't as simple as that but ultimately, the answer is still yes. The VA judgment would have to be domesticated into VA and then the holder of the judgment could seek a garnishment through the WV courts.

[Denise1123]

So the laws of the state where the debt was incurred are the ones that are followed with regard to judgments?

I screwed up the 2nd question (sorry!)...

I meant to say can a Virginia court order garnishment of wages of a debtor who resides in West Virginia. I'm thinking it will have to be filed in a WV court following WV laws?

This is for a 1996 auto loan that I am 99% sure was paid in full in 1997, but we cannot find any documentation yet. I hardly remember what I did a week ago, let alone 15 years!

[jk]

Denise1123;493735]So the laws of the state where the debt was incurred are the ones that are followed with regard to judgments?

no. the state where there was a court action and the judgment was entered is what determines the length of time the judgment is valid. It is possible to incur a debt in one state and be sued in a different state. example: if I lived in VA and incurred a debt. If I subsequently move to WV and default, the creditor can sue me in WV. In that case, the judgment would be ordered by a WV court and the life of the judgment would be based on WV law. If they sued me while I still lived in VA in a VA court, the life of the judgment would be based on VA law, even if I moved to another state after that.

I meant to say can a Virginia court order garnishment of wages of a debtor who resides in West Virginia. I'm thinking it will have to be filed in a WV court following WV laws?

If there is already a judgment, the creditor can seek to have the VA judgment domesticated (acknowledged by the WV courts) and the judgment can then be attempted to be collected in WV. If there is no judgment yet, they have to sue you first. Generally they would have to sue you in your state of residence but that is not a 100% truth.

This is for a 1996 auto loan that I am 99% sure was paid in full in 1997, but we cannot find any documentation yet. I hardly remember what I did a week ago, let alone 15 years!

If nobody has been sued yet, you might have a valid statute of limitations defense which would prevent them from winning a judgment. Is there a judgment?

a quick timeline if you would.

date of loan
date of last payment (as best as you can)
state of residence when loan was made
when did you leave that state

[Denise1123]

Yk – First, thank you so much for answering me so quickly and trying to help. I am very grateful! Next, I have more information now that makes this all even more obnoxious than I could have imagined! Let me give you the story:

This is happening to my now-significant other. In about January of 1996, he purchased a car from one of those terrible used car lots where everything is very shady. He had poor credit and of course they would help him. He may have been late on some of the payments, but he made them eventually, and the finance (Friendly Finance) company did have to contact him on a number of occasions. After about 6 months, he traded the car in to another shady dealer for one of their small Chevy pick-up trucks and they did the paperwork paying off the first loan and including it in the payment he would now have for the truck. Again, he may have been late on some of the payments, but I believe he paid everything he needed to. After about another 6 months, he traded it in and bought a Toyota pick-up truck from a reputable Toyota dealer. And of course, they did the paperwork to add what was still left on the loan for the 1st pick up truck into the loan for the Toyota pick-up truck. Again, he paid all of those payments on time. In 2004, he traded that truck in to Toyota and purchased a new vehicle and it is now paid off. Of course that loan included all of the loans that weren’t fully paid from the shady dealers so it was huge, but it is now over and paid in full.

Now, in 1996 when he purchased the Chevy pick-up, that shady dealer did NOT pay the first loan from Friendly as they said they did and as the paperwork said they did, but he did not know that. He moved back to SD for about a year in this period, so he made a mess of things from here. He had credit problems so when he started getting notices from Friendly at my home when he was in SD, I told him about them but he didn’t want to deal with them (BIG GIANT MISTAKE). Friendly eventually sued him and entered a judgment which has been on the books since that time. The whole thing disappeared or so he thought. In 2005, we moved to WV, and he never received anything from anyone during this time. About 3 years ago, he started paying attention to his credit report and fixing things. Paying off small unpaid debts, etc. He is pretty much finished – or so he thought….and then this. The 1996 judgment is not on his credit report so he thought it was somehow taken care of – basically he forgot about it.

One of those debt collection firms who buy off old uncollectable debts purchased his for what I assume was a tiny amount, and are now trying to collect the $4,400 that the second shady dealer did not pay to Friendly, along with more than $15,000 in interest and administrative costs. He found out because the Federal payroll office (he works for the federal government) sent him a notice of wage garnishment from the Fairfax County Virginia district court for the $20,000. For some reason, the payroll office did not implement the garnishment – something about the dates being already past, so they couldn’t meet the timeframes. They have closed the case and sent a notice back to the court telling them why. If/when the attorney files another request and the payroll office receives it, they will have to implement the garnishment. I actually think something is wrong with this – I think the payroll office has to receive a notice from the state he resides in – WV. Is this correct? I understand the law firm only has to get it domesticated in WV and then his wages could be garnished, but I’m not sure WV will do it. They have different laws regarding garnishment and they also have a 10 year SOL on judgments. Regardless, I suppose the law firm can/will try.

Meanwhile, he contacted the law firm and argued that the loan to Friendly was paid by the next shady car dealer and of course that he paid it. The law firm says gee that’s too bad, I wish you had a copy of that contract because then we could go after them, but you’re the only one we have a contract with so we have to get it from you even though you already paid it. (This is what one gets when you don’t deal with problems as they arise!!) They proceeded to tell him that there are a huge number of shady car dealers that did this to a huge number of people, and then of course went out of business. And all of those stupid bad-credit people who tried to do the right thing for once are now getting stuck with these loans that they have actually paid from their own pockets but the shady dealer did not pass on.

My significant other offered to pay the law firm the original debt and attorney fees and admin costs, somewhere around $5,000, and they are supposedly contacting Friendly to see if they will accept that. Gee, they feel bad that he is getting stuck with this, but they really want the entire $20,000 and are waiting for his garnishment to come through because they expect that they will be able to get all of it. They don’t know yet that the payroll office has closed it and they have to start again and I believe they have to get one from WV – is this true? This is very important, because the Payroll office person (who I think is just one of the clerks there) doesn’t know that it has to be from the garnishee’s state of residence. My significant other will need to contact them and make sure a higher official in the payroll office knows this, which I imagine they must?

Now – he is waiting for the law firm to call him back to see if they will accept the $5,000, and he believes the law firm is waiting to see if they get the garnishment on the 18th (which they won’t because I spoke with the payroll office and they have closed the case and will do nothing until they get another order). I realize he’s the idiot for not taking care of business way back when. And for not having paperwork for all this stuff (he is going to do another search but last year we burned a number of boxes of old records thinking we didn’t need them…ha). Doesn’t it seem that some sort of credit organization or some sort of law can help all these people who are getting stuck by all of these car/finance companies who collected money but did not pay the loans off?

Any help or guidance is much appreciated and I totally apologize for this HUGE posting.

I should mention that my significant other changed his name somewhere around 1998. He is native american and received a "real" name in a ceremony so he legally changed it. Because of this, WV has not delivered anything to this address with his old name on it (which surprised me a little?). Therefore he has not received one thing and knew nothing about any of this. Even back in 1996 when they got the original judgment when his address was in VA, there was no notice that any of this was happening. He never got the chance to argue his side, though he probably would have hid from all of it anyway because that was his MO back then.

[jk]

OVERLOAD...CANNOT COMPUTE...DANGER

make it simple;

where was the judgment originally entered?

when?

is there more than one judgment?

[Denise1123]

LOL - I know - so sorry.

Judgment entered in Fairfax County VA in 1996 - just one

garnishment order from Fairfax County Court attempted last week. Not successful - payroll office is requiring a new order that they can meet timeframes for. But payroll doesn't seem to know that it must come from a WV court (is this true?)? If so, do you know the law that says a garnishment order must come from a debtor's state of residence?

Currently reside in WV since 2005

[jk]

ok. that judgment is valid and enforceable until 2016, in VA at least.

Now, when you go to WV, you have to consider the WV laws on limitations for a foreign judgment.

§55-2-13. Foreign judgments and decrees.
Every action or suit upon a judgment or decree rendered in any other state or country shall be barred, if by the laws of such state or country such action or suit would there be barred, and the judgment or decree be incapable of being otherwise enforced there. And whether so barred or not, no action against a person who shall have resided in this state during the ten years next preceding such action shall be brought upon any such judgment or decree rendered more than ten years before the commencement of such action.

I have to say I am a bit confused with this. While it is clear that if he resided in WV for 10 years, the VA judgment could not be enforced after the 10 year period. The lack of understanding I have is; does that mean that anybody that has not lived in WV for 10 years is fair game for the life of the foreign judgment. To me, that is what it appears to say.

So, if it is enforceable, it must be domesticated and an order sought to garnish his wages. If it isn't enforceable, it isn't enforceable.

Hopefully one of the others can help with this.

so, what I would do, even without knowing the true answer is: if a garnishment is applied for, I would still contest it based on the 10 year limitation. The worst that will happen is you lose. The best is they will be refused an order to garnish.

If so, do you know the law that says a garnishment order must come from a debtor's state of residence?

a foreign court does not have the authority to enforce that courts home state laws and actions in a foreign state. The action of seeking an order from the resident state court would be domesticating the judgment. In other words; they bring the judgment from VA to the WV courts and ask to be allowed to take action to collect on that VA judgment. It is still a VA judgment though.

[Denise1123]

Wow - I'm still thinking about all of this. For now though, we have to send something to the payroll office so they understand that they can't/shouldn't enforce or put into place a wage garnishment that isn't from his resident state - WV. The payroll guy was going to do it but he couldn't meet the court ordered timeframes. So he isn't aware of what you say here.

I understand what you say about a foreign court not having the authority to enforce a home state laws, but where is a citation that says garnishments must be ordered by the resident state? Is that a federal law or does every state have their own version of it? What can I send the payroll office?

I have other questions, and if you aren't bored or annoyed yet, would you mind if I come back with a few more later this afternoon or evening? THANK YOU!!!!!

[jk]

but where is a citation that says garnishments must be ordered by the resident state?

The foreign state has no jurisdiction (power to act) in the resident state. They have no power to order anything outside of their jurisdiction. The must ask the resident's states court to enforce their judgment by themselves entering an order that would effectively enforce the judgment from the foreign state. The resident state's court can do it or they can refuse to do it. If they refuse, the foreign state has no power to take any action in the resident state.

The HR cannot act on the foreign judgment. It must act upon a resident states courts order. If the holder of the judgment has gone to the WV court to seek an order of garnishment, the resulting order of garnishment will be a WV court order and must be complied with. You would need to argue they have no right to be given a writ of garnishment based upon the law I cited above. (as I said though, it doesn't actually appear to be able to protect him from the garnishment but I would try if it was me)