Judgment Enforcement Involving Two States

[Nightmare]

My question involves judgment recovery in the State of: DE & CA

Judgment was issued by a federal court against the defendant for a tort that did not benefit her husband or child in any way. Judgment debtor is a housewife, who lives with her husband and child in Delaware. The husband works remotely for an employer in CA, visiting the state (Calfornia) every two months for a week for meetings / conferences etc.

My questions are as follows :

1. Can the husband's wages from California be garnished by the creditor to satisfy the federal judgment as California is a community property state, even though the wife is the judgment debtor and the couple are DE residents ? Since the tort did not benefit the husband or family in any way, will the husband's wages be exempt from garnishment ?

2. Can the couple's joint bank account or the husband's sole bank account be garnished in Delware ? I am aware that Delaware does not permit bank account garnishments but would there be an exception for a tort judgment by a federal court ?

3. The family planned to move to Texas later this year, but the husband would continue to work remotely for the California corporation. How would this move affect garnishment status of his wages and / or bank accounts ? Would the bank accounts become garnishable at this point (they are with small local Delaware banks that do not solicit business outside the state) ?

My main confusion is the fact that this is a federal court issued judgment (due to diversity of citizenship and the amount of damages claimed). Is enforcing a federal judgment easier than enforcing a state judgment ? IRAs etc are exempt under Delaware laws, but would they become attachable / accessible to fulfil a federal court judgment ?

Thanks.

[Mr. Knowitall]

If the judgment is against the wife, not the husband, the husband is not a judgment debtor so his wages can't be garnished on that basis.

10 Del.C. § 3502(b) provides, "Banks, trust companies, savings institutions and loan associations, except only as to a wage attachment against the wages of an employee of the bank, trust company, savings institution or loan association, shall not be subject to the operations of the attachment laws of this State." A federal court order is not issued pursuant to the laws of the State of Delaware.

I'm not going to speculate about what might happen in the future.

Qualified retirement accounts are exempt from garnishment by federal law, with that law carried over to the states, not the other way around.

Given that you aren't employed and apparently have a huge debt hanging over your head, assuming the debt qualifies for discharge, you should consider consulting a bankruptcy lawyer about your options.

[Nightmare]

If the judgment is against the wife, not the husband, the husband is not a judgment debtor so his wages can't be garnished on that basis.

10 Del.C. § 3502(b) provides, "Banks, trust companies, savings institutions and loan associations, except only as to a wage attachment against the wages of an employee of the bank, trust company, savings institution or loan association, shall not be subject to the operations of the attachment laws of this State." A federal court order is not issued pursuant to the laws of the State of Delaware.

I'm not going to speculate about what might happen in the future.

Thank you, Mr. Knowitall. I am not the sharpest knife in the drawer, so would you be able to explain the above in layman's terms ? If Delaware laws do not permit the attachment of wages of the spouse of a judgment debtor or the couple's bank accounts, but a federal court order is not issued pursuant to the laws of Delaware, does this mean that the spouse's wages & the couple's bank accounts may, in fact, be attached ? I am unable to understand the above. When you say you cannot speculate on the future, do you mean that the laws may change in the future ?

Also, the wages are earned in California, which is a community property state. So, if the creditor domesticates the judgment in California, would he be able to attach the husband's wages there, as California is a community property state, technically making 50% of his wages the wife's (even if the employee resides in DE) ?

What is your opinion on this scenario ?

The couple has already considered bankruptcy discharge and was informed that tort judgments cannot be discharged in bankruptcy. They could still try but this would fail, if the creditor filed his objections in a timely manner (which, he is more than likely, to do). So, that avenue may not work out, after all.

Thank you in advance for your assistance / advise in this regard.

[Conrad Hunter]

Intentional torts can not be discharged in bankruptcy, though other types of tort judgments generally can.

No, they can't go after your income in CA. First, I don't know how they would even know about any of that unless you were subpoenaed to appear at a deposition with your financial records. As the judgment is not against you, you would file a motion to quash that. Also, unless YOUR NAME is on the judgment, it can't be executed against you. It could be executed against a joint account though there are rules on that. Don't know the details.

I doubt a community property state has any effect on creditor collections as that is not the purpose of the law. This is my opinion based on general principles of equity, etc. I do not know CA law and this is something you can research or someone else here might know. It is also something common enough to have come up before and there is likely CA case law on the subject.

[Mr. Knowitall]

I think you dropped a word - she's the judgment debtor and has no income to be garnished. They can't go after her husband's income via wage garnishment - in any state - because he's not a judgment debtor.

[Nightmare]

I think you dropped a word - she's the judgment debtor and has no income to be garnished. They can't go after her husband's income via wage garnishment - in any state - because he's not a judgment debtor.

Hi,

Thanks again. I had originally done some searching and was worried because I came across these :

http://www.courts.ca.gov/partners/do...n-sandiego.pdf

and

http://www.courts.ca.gov/11186.htm

Since CA is a community property state, the above seems to indicate that the income and debts of a couple accrued during the marriage becomes the joint assets / debts of both, regardless of who earns the income or who incurs the liability / debt. This is a pretty straight forward answer if the debtor is a CA resident. But what if he is not (as in this case) ? Can a non-resident's CA income be garnished to satisy his spouse's debt ?

What complicates this situation is that the judgment was ordered by a federal court, and not a state court. Hence my total confusion. Even if the above would not apply to CA income earned by a DE resident, would a federal judgment supersede DE state law which would prohibit a husband's income from being garnished to fulfil his wife's debt ?

Thanks again for your feedback / advise.

[Mr. Knowitall]

Rephrasing the question doesn't change the answer.