Category Archives: Creditor’s Rights

Many creditors assume that once an account-holder files for bankruptcy, collections must stop and the account should be written-off.  This is not necessarily true.  While the automatic stay prohibits the creditor from collection efforts while the bankruptcy is pending, there may still be a chance of recovering a portion of the money owed to you.  Afterall, one of the secondary goals of the bankruptcy process is to maximize return for creditors by reorganizing the debtor’s debts and selling any non-exempt assets to pay the creditors.

It is also important for creditors to remember that a debtor’s bankruptcy case may get dismissed, especially if the debtor filed under Chapter 13.  A dismissal is good news for a creditor because it means the debtor did not receive a discharge of debt.  Thus, the amount remains due and owing.  Once a case is dismissed, the automatic stay terminates and a creditor may commence collection efforts again.

Lastly, if you are a creditor that has lien rights against a debtor, then your lien on the debtor’s property may survive the bankruptcy discharge.  This means that while you cannot collect your debt, you may be able to enforce your lien in the event the debtor attempts a sale or refinance.  If you hold a lien against a debtor, confer with your attorney regarding what rights you have at the conclusion of the bankruptcy case.

In sum, while the automatic stay prohibits collection efforts, that doesn’t mean you should immediately throw away your judgment against the debtor or write-off the account.  It is important to have an experienced attorney evaluate your rights as soon as you receive the notice of bankruptcy.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We represent creditors in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

Hopefully you read our blog yesterday titled “Wage Garnishments…A Powerful Tool for Creditors” for information regarding wage garnishments.  This blog focuses on non-wage garnishments, which are also sometimes referred to as account garnishments.  The most common form of non-wage garnishments is the garnishment of a judgment-debtor’s bank account.

Once a creditor has received a judgment against the debtor, the creditor can serve a garnishee (bank or other property holder) with notice of the garnishment.  The judgment debtor receives notice from the garnishee instead of the judgment creditor.  The garnishee is given instructions with what amount to be deducted from the account or property being held by the garnishee.  However, there are a variety of limitations are placed on non-wage garnishments, including:

• $300.00 in a bank, savings and loan association or credit union account ($600.00 for married account holders)
• Supplemental Security Income (SSI)
• Social Security benefits (SSA)
• Temporary assistance for needy families
• Veterans’ Administration benefits (VA)
• Certain pension benefits and retirement funds
• Workers’ Compensation benefits
• Some insurance proceeds

The law also provides protections for the debtor’s household goods, clothes, tools, and a certain amount of equity in a vehicle.  Otherwise, money deposited into a bank account or being held by the garnishee is available for the creditor to garnish to pay the judgment.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

Garnishment is a method creditors can use to collect money from a borrower after they have obtained a judgment against him/her.  A judgment must be enforced in order for you to receive payment, and a garnishment is an effective collection tactic.  There are two main types of garnishment – wage garnishments and non-wage garnishments.  This blog will focus on wage garnishments.  Please read tomorrow’s blog for information on account garnishments.

A wage garnishment occurs when a creditor serves the judgment debtor’s employer with garnishment papers which demand that the employer deduct a specified amount from all of the debtor’s paychecks until the debt is paid in full.  The employer must file an answer regarding the debtor’s employment status and information regarding his/her payment amounts and schedule.  After certain procedures are followed, the employer will deduct the amount appropriate amount from the employee’s paycheck and it is delivered to the creditor.  If your employer fails to comply with the garnishment order, they could be held liable for the debt that is due.

A wage garnishment is limited to a percentage of the employee’s “disposable earnings” under federal law.  Your disposable earnings are the amount that is remaining after the required deductions (like taxes) are taken out of your paycheck.  In Arizona, a creditor may only garnish the lesser of 25% of a debtor’s non-exempt disposable earnings or the amount of weekly earnings that exceed thirty times the hourly minimum wage.  It is important to note that sources of income such as social security benefits cannot be garnished.

If you are interested in learning more about wage garnishments, contact Windtberg & Zdancewicz, PLC today!

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

If you are a creditor and you have accounts receivables you would like to collect, this blog will give you a general idea of what is involved in a collection lawsuit.  The most important step is selecting the best attorney to represent you.  For experienced and knowledgeable attorneys, contact Windtberg & Zdancewicz, PLC today.

Below is a summary of the basic 3 steps of a collection lawsuit in Arizona:

1. Your attorney will draft a complaint (also referred to as a “petition” in some states) and have a process server deliver it to the defendant (person owing you the money).
2. The defendant must file an answer or response to your complaint within 20 days after service of the complaint.  If the defendant fails to do so, 10 days after the default application is filed, the court may enter a default judgment in your favor.  Your attorney can then proceed with helping you collect on the judgment.
3. If the defendant files an answer, a variety of things can occur including discovery and disclosures, arbitration, and a pretrial conference.  Each of these activities moves you toward a trial.  At the trial, a judge or jury will listen to the arguments and evidence of both sides and render a judgment.  Once you have judgment in your favor, you can begin collection efforts against the defendant.

Obviously, this is a very brief description of collection lawsuits, but it gives you a general idea of what is involved.  If you would like to learn how the attorneys at Windtberg & Zdancewicz, PLC can assist you with your collection matters, contact them today to schedule an appointment!

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

Many creditors mistakenly believe that when one of their debtors files a bankruptcy case, all hope of being paid is lost.  This is not necessarily true!  Depending on the type of claim you have against the debtor, it is possible for you to recover a significant amount of the debt owed to you.  The attorneys at  Windtberg & Zdancewicz, PLC have extensive experience in representing secured and unsecured creditors in pursuing their claims against bankrupt debtors.

The automatic stay immediately goes into effect when a debtor files a bankruptcy case, regardless of what chapter the case is filed under.  The stay prohibits further collection efforts by creditors while the bankruptcy case is pending.  Thus, as soon as you receive notice that the debtor has filed a case, it is imperative that you halt all debt collection efforts (including pending lawsuits).

It is important, however, for creditors to understand that the automatic stay has limitations.  For example, a creditor who meets certain criteria can file a motion for relief from the automatic stay.  The motion typically sets forth arguments for why the stay should not apply to the creditor.  Such arguments include debtor’s failure to remain current on payments, debtor’s failure to maintain adequate insurance on assets pledged as collateral, or other similar circumstances which warrant removing the stay from the creditor.  A creditor may also be able to pursue preferential or fraudulent transfer litigation within the bankruptcy case.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

Welcome to our blog! At Windtberg & Zdancewicz, PLC, we focus on creditor’s rights. What are creditors’ rights? The law is designed to protect creditors by providing them the ability and certain methods to collect what is owed to them. The methods available to creditors vary from state to state, but generally they include the following:

• file a lawsuit to obtain a judgment against the debtor

• place a lien on the debtor’s property or assets

• seizure and forced sale of property or assets

• garnishment of debtor’s wages or bank account

• foreclosure of real property

The rights of creditors can depend on the type of debt owed, terms of the loan, and the documentation evidencing the debt. Not only do creditors have rights against the debtor, but they also have rights against other creditors. When several creditors are attempting to collect from the same debtor, the law provides a priority amongst the competing creditors.

In short, creditors are either secured or unsecured. A secured creditor is one that the debtor pledged an asset to as collateral to support the loan. If the creditor has a “perfected” security interest (which means they established a public record of the debt), they have priority to that asset. Typically, creditors follow the rule that first in time is first in right. Unsecured creditors are the most common form of debt owed, including credit card bills and medical bills.

If you are interested in learning more about the rights of creditors, please check back and read our blog each week. Also, feel free to call Windtberg & Zdancewicz, PLC, and schedule an appointment today!