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Garnishing a Bank Account in Pennsylvania
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October 22, 2021
First things first, if a debtor wants to pay you voluntarily, (even on payments) - consider accepting them, so that if you need to pursue a debt collection lawsuit further, the debtor is actually funding the debt collection efforts against themselves. Never take it personally. Settling it is almost always worth considering because the goal of debt collection in Pennsylvania is to collect money owed. And the best way to collect is for the debtor to want to pay you voluntarily. So keep options open when possible.
Now what do you when the debtor does not want pay you? Well, you have to get a judgment against the debtor. That is a legal determination by the courts that the debtor owes you money. This article is written to help you collect money owed when debtors do not want to pay what is owed. Here is a list of some actions creditors should consider to collect.
A judgment is a legal determination by the courts that money is owed from one party to another. An award or verdict are NOT the same thing as a money “judgment”. Even if you win a lawsuit, you can not force collection remedies until a Praecipe to Enter Judgment is actually filed with the local county courts in Pennsylvania. This document called a “Praecipe to Enter Judgment” is governed in part by PA R.C.P. Rule 237.1.
Step 1 to collect a judgment in Pennsylvania is to file and record the judgment in each and every county where the debtor resides or owns real property. Real property simply means a house or land, and is different from personal property, such as a car, furniture or guns. There are 67 different counties in Pennsylvania, and it is important to actually file and record (or domesticate) your judgement in each and every county which the debtor owns property or resides. This may require a title search, credit report or other property background search to investigate what and where the debtor(s) actually own. Certain county property assessments sites allow users to search by property owner name and can be an effective tool in finding properties to lien.
The reason that you need to domesticate a judgment in each and every county is because judgments in Pennsylvania only act as an automatic lien against real property if the judgment is properly filed in that specific county. This means that the debtor can not sell their property without satisfying the judgment first, or if they do, the lien still attaches even if sold. These judgment liens on property are valid for twenty (20) years in Pennsylvania. However, if you file your judgment in Allegheny County, and the debtor owns property in another county (i.e. Beaver County), the judgment would not act as a lien in the neighboring county. Filing judgments can help you collect even years later, by remaining as a lien against the defendants property. If that property attempts a refinance, typically the bank or refinancing company will not allow the refinance without requiring that the underlying judgment be paid first. We have had many creditors get paid many years later simply by properly recording the judgment in the correct counties.
CAUTION: Although a judgment may act as a lien against real property for twenty (20) years in Pennsylvania, you cannot seek to execute on your judgment unless it is revived every five (5) years. Therefore, we strongly encourage creditors to also revive their judgments at least once every 5 years by filing a revival of judgment with the respective county department of court records or Prothontary’s Office.
Also, be careful about magistrate judgments. Magistrate courts are the lowest court system in Pennsylvania, and allow money judgments up to $12,500.00. However, Magistrate judgments are NOT always identified by credit reporting agencies and will often not show on credit reports. Thus, you may have a judgment that is NOT acting as a lien. If you have a magistrate judgment, you should also always file the judgment with the county courts where the debtor resides or owns property. You need to make sure the judgment is filed with each and every county court where the defendant may own property or assets and revive those judgments every five (5) years to keep debt collection options open.
If entering your judgment with the county courts does not apply pressure to collect, then you can use the Sheriff’s Office of each specific county to help force the debtors to pay. Understand that the sheriff will not take action until a "writ of execution" is filed with the county and they receive the original writ of execution and a Sheriff Instruction Sheet (sometimes provided by each respective Sheriff’s office).
Step 2 to collect a judgment is to file with the department of court records a praecipe for a writ of execution. The writ is the “key”which allows the Sheriff to execute on a judgment. Remember, the actual writ is filed with the county courts first, and then the original writ (with a stamped seal on it) must be delivered to the Sheriff’s office. The writ authorizes the sheriff’s office to take certain action to collect the monies against the debtor. When you file a writ of execution you are then directing the sheriff to take some additional action concerning the judgment. This can apply significant pressure for the debtor to pay.
These actions consist primarily of:
The writs of execution require additional sheriff costs, and creditors should consider conducting discovery in aid of execution before proceeding. This can include a deposition of the debtor to identify assets and bank accounts, or a request for employment, tax and banking information. Debt Collection in Pennsylvania is really about applying pressure on the debtors assets so that they want to avoid execution and pay voluntarily if and when possible.
Step 3 to collect a judgment is to seize money from banks or third parties who may owe the debtor money. Seizing bank accounts or accounts help by other third party creditors freezes the accounts immediately when they are served.
To seize a bank account in Pennsylvania, you must take the following steps:
The garnishee is the bank or other party who may have money owed to them from the debtor. This could include tenants if the debtor has rental property or money owed from a lawsuit or otherwise.
The “interrogatories to the garnishee” are a legal pleading asking the bank or other third party whether or not they are holding any money of the debtor. An example of “interrogatories to the garnishee” can be seen by clicking on this link.
The best part about seizing bank accounts is that the debtor’s accounts are immediately frozen once the sheriff serves the writ of execution and interrogatories to the garnishee. Most often, this invokes panic from the debtor and the best news about this procedure, is that it freezes the entire account balance regardless of the judgment amount. So for example, if the judgement owed is $10,000, and the bank account has $25,000 in it, the entire account is frozen. This situation almost prompts direct action by the debtor, especially when the account balance exceeds the amount actually owed.
Once the account is frozen, the bank or other third party can be directed to pay you directly.
CAUTION: You should note that marital bank accounts are exempt from attachment in Pennsylvania. This means that unless you have a judgment against both the husband and wife, the account may not be frozen if it is a marital account.
The garnishee (most often the bank) is required to answer the interrogatories within 30 days. This should specifically inform you as to whether or not the debtor actually has money at that bank. If they do, the bank should release the money voluntarily (less $300 statutory exemption). if the bank does not release the monies, then the creditor can actually enter judgment against the garnishee and follow the same execution procedures against the garnishee. This can be a very effective method to get paid.
In addition to seizing bank accounts, you can also have the sheriff levy and sell personal assets of the debtor to collect a judgment in Pennsylvania. Personal assets can include furniture, tv’s, jewelry, guns and firearms, other valuables or antiques. Typically, you cannot seize retirement accounts or pensions, but most other personal assets, including boats, ATV's, construction equipment etc. can be levied and sold.
The procedures for selling personal assets of the debtor are similar to seizing a bank account.
With personal assets, the sheriff serves the writ of execution and then takes an inventory of all assets to set for a sale. The procedure is called a levy. Once the levy is performed (i.e. the Sheriff takes an inventory of the assets), it is illegal for the debtor to remove any of the items listed and can face criminal charges if they do. This includes any levy taken on personal assets and/or vehicles.
The sale of the assets is usually scheduled within a few weeks of the levy and third parties are allowed to file claim exemption forms objecting to the sale. If third parties show for the sale, they must bid a minimum of the judgment amount plus costs. If no one bids high enough or no one shows at the sheriff sale, then the creditor can bid the amount of the costs as an offer for the assets, retain possession and sell the assets as they seem fit. This includes taking immediate possession and then selling the assets directly at the sale who did not bid up to the judgment amount.
You can also collect a judgment by seizing vehicles in the same procedure. When it comes to vehicles, creditors have the option of having the vehicle towed at the same time the vehicle is levied upon. Consideration should take place considering whether the vehicles have liens before levying and/or towing them.
Most of the time assets (personal property or cars) are levied, debtors try to resolve the debt, but if they do not and the execution actually moves forward to sheriff sale, then the creditor needs to be prepared (usually with a large van or truck) to take possession of any and all assets which were levied on. Meaning the Sheriff will sell them to you for just the costs for the sale (typically very low), but you better be ready to take possession and transfer the assets as well.
Even if the assets have limited value, creditors can repossess personal assets with the idea that applying this pressure will force the debtor to want to pay voluntarily.
Finally, you can collect a judgment in Pennsylvania by forcing a sheriff sale of the defendants real property.
This is significantly more costly than seizing a bank account or levying on personal property (est. $2,000 to $3,000 more in court costs depending on the county involved) but can very effective and profitable if the debtor owns real property. Each of the 67 counties in Pennsylvania have different costs, forms and policies as to how Sheriff Sales of real property are handled.
Before considering a sheriff sale of real property, you must always do a title search first (estimated cost $150) and a mortgage search with the respective county, so that you do not waste costs on a property that already has a lien from a bank or mortgage company.
The advantages of a real property sale is that in theory you can take possession of a debtor’s property for the cost of your judgment even if the property value exceeds the value of the judgment. This means you could actually profit on a potential resale of the property.
The possible disadvantage of a real property sale is that it is quite possible that other creditors have liens ahead of your judgment. That means that they would get paid first at your expense. It would make little sense to try to force a sale of a property if the property is already attached with a mortgage or encumbrance that exceeds the value of the property. Again, a title search is always recommended before proceeding with this option. It is also almost always a good idea to have an appraisal of any real property before proceeding with a sheriff sale against it to determine the equity, if any, in the property.
The goal is getting paid. Having a debtor wanting to pay you voluntarily is always optimal. Keep options open. Don't be afraid to accept payment plans so that if the debtor defaults, they are in essence paying for additional legal action against themselves. The best ways to apply pressure and to collect a judgment in Pennsylvania is to:
If you have questions about a Pennsylvania debt collection case, please feel free to reach out to attorney Noah Fardo directly at npf@pghfirm.com or contact us for a free consultation and would be happy to review and advise.
This article is written for entertainment purposes only. Each case and set of facts are unique. This article should not be relied upon for legal advice and we do not offer representation unless a written agreement is in place. But as stated, we are happy to answer questions if you have them.