Authored By: Northwest Justice Project
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If a creditor has a judgment ordered by a court and wants to collect the money from you, you may receive an order to attend a Supplemental Proceedings court hearing. #0210EN
- Should I use this?
- What is a Supplemental Proceeding?
- What happens at a supplemental proceeding?
- Do I have to go to the supplemental proceeding?
- What happens when I go to court?
- What is “exempt property” and why does it matter?
- Can the creditor sell my house or my property?
- Can they garnish my wages to pay off my debt?
- What does “collection-proof” mean?
- I think I am collection-proof. Do I still have to go to court?
- Would it help to file for bankruptcy?
- Get Legal Help
Should I use this?
Yes, you should use this if you received:
an Order for Examination of Judgment Debtor or
a Notice of Supplemental Proceeding or
an Order to Show Cause re: Supplemental Proceedings
(Different counties call this Order or Notice different things. They all mean the same thing.)
What is a Supplemental Proceeding?
A creditor has a judgment ordered by a court and wants to collect the money from you. The creditor wants to know if you have property or income they can take. They will ask things such as:
Do you work? Who is your employer? How much do you earn?
Do you have any bank accounts, stocks, bonds?
Do you own a home? A vacation home?
Do you own a vehicle?
How much is your property worth?
The order requires you to go to court to answer the creditor’s questions. This meeting is called a supplemental proceeding.
If you get an order signed by a judge to appear in court, you must appear. If you do not, the court may find you in contempt (you violated the court’s order). It can issue a warrant for your arrest.
*You cannot be sent to jail because you cannot pay your debts. You may be sent to jail if you do not show up to court after getting a court order to appear.
What happens at a supplemental proceeding?
The creditor’s lawyerwill ask you questions about your financial situation. You will also talk about whether you can pay the judgment. You have the right to be treated respectfully. If you feel that the creditor’s lawyer is rude, or pressuring or threatening you, or you do not feel heard, ask the court to have your conversation recorded.
The creditor wants to know if:
Your wages, bank account, or other property can be garnished.
Your property can be sold.
You can agree with the creditor on another way to pay.
You are “collection-proof.” See below.
Do I have to go to the supplemental proceeding?
Yes. You must go. The creditor’s lawyer may offer to let you respond in writing instead of going to the hearing. If you receive documents that give you the option of going to the hearing, follow through with the creditor’s lawyer. Make sure the hearing is cancelled if you fill out the paperwork they send you.
What happens when I go to court?
When you appear in court, a judge will call out your case name. Listen closely for it. Stand up. Let the judge know you are there. Go to the front of the courtroom. The judge will put you under oath.
Usually, the judge will then have you leave the courtroom with the creditor's lawyer. Sometimes these meetings are in public areas of the courthouse, such as a hallway. Be careful that other people do not overhear your private information, like bank account numbers. You can ask the lawyer to move if you feel uncomfortable. The lawyer will ask you questions about your property and employment. The judge will not be with you.
*Do not bring your children with you, if you can help it. The judge probably will not let them sit in the courtroom.
You will need to let the creditor’s lawyer know which of your property is exempt. We talk more about exempt property below.
You can stop the meeting and go back to the courtroom if the lawyer treats you badly. Examples: The lawyer is rude, asks questions that do not make sense, or is looking for information not related to your income or property. Tell the judge what is wrong. The judge will try to solve the problem.
You do not have to answer a question if you think the answer would be an admission of a crime, like fraud or theft. If you think this might be the case, ask the judge for time to talk to a lawyer.
You do not have to give the creditor’s lawyer any money or property at the supplemental hearing. All you have to do is provide information about income and property.
What is “exempt property” and why does it matter?
The law protects – or “exempts” – some income and property from being taken from you to pay for a money judgment. Some kinds of income are exempt, including:
Social Security Disability, Retirement and Survivor benefits
Unemployment compensation benefits
Child Support you receive
Federal student loans
Wages - part of your wages is exempt
If you owe consumer debt, and if you earn less than these amounts, none of your wages can be garnished:
$472.50 weekly (35x the state minimum hourly wage)
$945.00 every 2 weeks
$1,023.75 twice a month
Even if you earn more than these amounts, you may still keep the greater of 35 times the state minimum hourly wage or 80% of your net pay.
Read Money that Cannot be Taken From You to Pay off a Debt to learn more about exempt income and property.
If a creditor tries to take money from your bank account, call CLEAR at 1-888-201-1014 for help. Also, read How to Claim Personal Property Exemptions and Money that Cannot be Taken From You to Pay off a Debt.
Some kinds of property are also exempt, including:
Home. The equity in your home is exempt up to $125,000. The equity is how much you would keep after you sell your home and pay off the mortgage and other liens. Example: Your home can sell for $200,000. You still have a mortgage for $125,000. You have equity of $75,000.
Clothing and jewelry up to $3,500 in value.
Household goods. Household goods, appliances, furniture, yard equipment, provisions and fuel up to $6,500 in value per person, not to total more than $13,000 per couple.
Cash. Up to $2,000 in a bank account for a judgment for consumer debt.
Cars. Up to $3,250 of equity value in a car is exempt for a single person; $6,500 of equity value in two vehicles is exempt for a married couple.
Can the creditor sell my house or my property?
A judgment is an automatic lien on your home. A lien on the property means you must pay off the judgment before you sell the property. The creditor cannot make you sell any of your property that is “exempt property.” However, if you have more than $125,000 in equity in a home you live in, the creditor could force a sale. If you are facing the forced sale of your home, contact CLEAR right away. (See contact information below.)
Can they garnish my wages to pay off my debt?
Yes, in some cases. A creditor can ask your employer to garnish your wages. A creditor can garnish your wages and your bank account at the same time.
Money that Cannot be Taken From You to Pay off a Debt has more on when and how much income can be garnished.
If possible, do not get your paycheck by direct deposit. If you deposit your paycheck after your wages have been garnished, a creditor may claim that the funds are no longer exempt as wages and may garnish your bank account. Never give creditors permission to withdraw money from your bank account.
What does “collection-proof” mean?
If you are collection proof, a creditor can still sue you and win a judgment against you, but cannot take any of your income or property to pay off the judgment Even collection-proof debtors have to answer questions about their property. Failure to do so could result in a bench warrant.
You may not be collection-proof forever. Creditors may be able to collect from you in the future. (Examples: If you inherit money, re-enter the workforce after a disability, or get a higher-paying job.)
The judgment may become much larger as time passes because interest and fees are added on. A creditor can try to collect on a judgment for up to twenty years after the court ordered it. If your circumstances change (for example, you get a job or the equity in your home increases), contact CLEAR. (See below.) You may have other options, like bankruptcy.
I think I am collection-proof. Do I still have to go to court?
Yes. Answer the lawyer’s questions. Tell the lawyer about your exemptions. Tell the lawyer you think you are collection-proof. You should also tell the lawyer if you think your finances will not get better for a long time.
Would it help to file for bankruptcy?
In most cases, you do not need to file for bankruptcy if you are collection-proof. A creditor cannot take any income or property from you, even if a court has entered a judgment saying you owe money.
However, if you earn more than $472.50 weekly, you may want to file for bankruptcy if your debts are for credit cards, unpaid rent, or medical expenses. (These are usually dischargeable in bankruptcy.
Dischargeable means the judge can cancel the debt through the bankruptcy.) It would cost much less to file a bankruptcy petition than to have to live with the amount of wages you could lose to garnishment, due to the judgment interest rate and collection fees.
Once you file your bankruptcy petition, creditors are “stayed” (stopped) from proceeding with a wage garnishment. If you get a discharge in your bankruptcy, creditors whose claims were discharged are permanently stopped from collecting these debts.
Get Legal Help
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