I was the third lawyer Lisa saw for a Virginia Bankruptcy Consultation
Lisa had a Virginia Bankruptcy consultation with two well known bankruptcy lawyers. Then she came to see me.
Both of those lawyers told her that her income was too high. She could not file a Chapter 7 bankruptcy. She would need to file Chapter 13. They reached that conclusion without looking at her paystubs or making her do a budget. Those lawyers offer what I call a “no-preparation consultation.”
Lisa had done research on her own. She knew that high income people can still be eligible for Chapter 7. (I explain how that works, here.)
AJ spent an hour going over Lisa’s situation, reviewing her forms as part of our 29 point paralegal consultation. Then another hour typing Lisa’s information into the computer for us to look at together.
We told Lisa she needed to fill in our 37 page forms. She was glad. Lisa spent an hour preparing the forms. Then Lisa spent another hour going over the forms with AJ, one of my bankruptcy paralegals.
AJ, after that hour with Lisa, took another hour to type Lisa’s information into the computer. So I had it.
Then Lisa and I talked for an hour.
At the end of that hour, here’s what we decided.
1. In spite of what two lawyers told her, Lisa had income eligibility to file a Chapter 7 bankruptcy.
2. There was no way Lisa could afford a Chapter 13 plan.
3. There was a non-bankruptcy solution that would work better for Lisa than either Chapter 7 or Chapter 13.
Lisa’s persistence is unusual. She talked to TWO lawyers who both told her the same thing–she still wanted a third opinion.
Lisa’s persistence is unusual. Her problem isn’t. The problem is, a no-preparation consultation will steer people wrong, a lot. I guess one out of three of my clients would get steered wrong by a no-preparation Virginia bankruptcy consultation.
That’s why I work they way I do. I hate to steer people wrong.
Some people get irritated that they can’t “just ask a question.” And people don’t like being sent home to get more information.
What people do like, is that their bankruptcies get approved. And they like their bankruptcy hearings to be easy. You can read what people say in my CustomerLobby reviews.
If you want the best possible bankruptcy advice, call us. Set an appointment. We’ll ask you to do a lot of work to get ready for our Virginia bankruptcy consultation. And we’ll do a lot of work to get ready to meet with you.
Is it legal to get garnished under Virginia garnishment law in a county that you don’t live in any more?
I’m a Virginia bankruptcy lawyer. I see people all the time who get garnished with no notice. (You NEVER get enough notice–I explain that here. But you SHOULD get a copy of the Virginia garnishment in the mail about the time your paycheck or bank account gets hit.)
If you get no notice at all, maybe you’ve moved from the address where they got the judgment. Maybe you moved years ago. The Virginia garnishment notice goes to the old address and never gets to you.
Is that legal? Is it legal to garnish somebody by sending notice to an address they no longer live at?
Virginia bankruptcy lawyer Kaitlin Vaillancourt
Many courts around the country, say that’s ok. I think, under Virginia garnishment law, it’s a violation. Specifically it’s a violation of the Fair Debt Collection Practices Act. At least if you’ve moved to a different county.
Kaitlin Vaillancourt and I had an article about that last week in the Virginia Bankruptcy Law News. The Virginia Bankruptcy Law News is published by the Virginia State Bar Bankruptcy Law Section. You can read it here.
The Fair Debt Collection Practices Act says debt collectors can’t bring “any action” against you collect a debt in a judicial district where you don’t live. (Or where you lived when you signed the contract.) (In Northern Virginia, each county is usually a different judicial district.)
Some courts have decided that a garnishment is not an legal action “against” you. It sure feels like it’s against you, if you’re the person whose pay is getting garnished. The Ninth Circuit says of course it is. Fox v Citicorp. A recent case in Ohio said the same thing. Adkins v Weltman, Weinberg & Reis. I’m reprinting their explanation in full.
“Thus, resolution of the motion to dismiss hinges on whether a garnishment action is “against” the consumer who is a judgment debtor. Only the judgment creditor and the judgment debtor have any beneficial interest at stake in a garnishment action. The nominal “defendant” in a wage garnishment, the employer-debtor of the employee-judgment debtor, has no claim to the money garnisheed. The employer’s only interest is in not becoming liable to pay the wages to both the employee and the employee’s judgment creditor. That danger is avoided by paying the wages into the court, which then determines who is entitled to those funds. The garnishment is not against the employer, it is against the employee-judgment debtor.”
But many judges have said it’s against your employer (or bank), not against you. (The First Circuit, in Smith v Solomon & Solomon, held that a garnishment is an act against the employer, because Massachusetts law requires that it be brought in the country where the employer does business. Bu contrast in Virginia, it has never been thought necessary to send a writ of fieri facias to the county where the garnishee resides. Burks. On the other hand, Virginia law does allow the garnishment to issue from the court where the debtor now resides. Code of Virginia 8.01-511.)
Kate and I looked at Virginia garnishment law, and found something called the fieri facias. That’s Latin, and it goes back to the time in England when lawyers used Latin a lot. Even if the Virginia garnishment is not against you, the fieri facias is. And they can’t get a garnishment without doing a fieri facias first. (Fieri facias is is “the ordinary judicial process for enforcing the collection of a money judgment by the sale of the property of the defendant.” Burks Pleading and Practice in Actions at Common Law.)
Next time somebody gets a fieri facias and a Virginia garnishment against one of my clients who’s moved to a different county, we’ll sue.
PS Here’s a Fourth Circuit opinion, Powell v Palisades, which describes garnishment as a step taken to collect a debt. That was under Maryland law, but it’s still very helpful. This was decided December 18, 2014. It probably means that garnishing you in the wrong county violated 11 USC 1692f–it’s an unfair means to collect a debt.
PPS We’re going to trial on this issue against the debt collection law firm, Caudle & Caudle in March 2016. I’m gathering up useful information.
Take a look at the Virginia Summons to Answer form. It also has a fieri facias, and is obviously only against the debtor. DC-440. The attorney General of Virginia has ruled that “writs of fieri facias, debtor interrogatories and garnishments are distinct, though related, proceedings.” To issue a Summons to Answer there must be named in both a judgment and fieri facias. Here’s just a fieri facias form. cc-1477.
Let’s look at the US Supreme Court decision in Mitchell v St Maxent’s Lease, 71 US 237 (1866). A fieri facias was issued against St Maxent the day after he died. The Supreme Court said it was void under the common law. Even though the property sought to be levied was still there, St Maxent was not.
PPS Had a bad day today in Fairfax General District Court. We did not get to whether we were right on our legal theory. Although she got a garnishment, our client was never actually garnished. (She was on leave from her job, so the employer didn’t have a paycheck to garnish.) No harm, no foul said the judge. There needs to be “actual damage.”
(We thought there was a decision in the U.S. District Court last fall was controlling. That case is Brown v Transurban. Federal Judge Cacheris said this: “The “injury in fact” suffered by Plaintiffs under the FDCPA is not any actual economic loss, but rather being subjected to the allegedly “unfair and abusive practices” of the Collection Defendants.” That wasn’t enough to persuade the Fairfax General District Court, today.
Well, that issue is now in front of the U S Supreme Court in a case called Spokeo v Robins. (That is a Fair Credit Reporting Case; these internet people search companies are covered as credit bureaus. Was there any evidence that the mistake caused Robins to lose a date, a job, a loan, anything? Or is just being wrong–and not fixing it–enough.)
We may hear from the Supreme Court sometime this spring. Until then, we need a case where somebody actually got garnished from the wrong county.
PPS Another circuit court said the the garnishment is not an action “against the consumer.” Here. Hageman v Barton That does not control whether the fi fa is “against” the consumer. But it doesn’t help.
Getting sued after a short sale is highly probable. Saw three couples this month who needed to file bankruptcy, because they were getting sued–garnished in one case–by the second mortgage after a short sale.
It was surprising that they were surprised. At the peak of the crisis, four or five years ago, second mortgages would take what they could get at a short sale and let the rest of it go. But they don’t often do that anymore. (At least not without intense negotiation. I’ve seen it once in the last year.)
And usually they make you sign that you KNOW that you still owe the money. So, where’s the surprise?