Attachment and Garnishment are often the collection tools of last resort. That's because their use means that you have not been able to effect collection of the debt without judicial remedy, and you have had to resort to filing a law suit against your customer, co-signer or guarantor. It's never a desired result, but often a necessary one.
This may be a good time for me to interrupt to tell you a quick story about how I became a creditor's attorney:
When I was in law school, a debtor/creditor case involving pre-judgment attachment had made its way to the United States Supreme Court. As it happened, a Florida resident by the name of Fuentes was challenging the constitutionality of such practices. In the State of Florida, lawsuits of this nature are brought against the State in the name of the State's Attorney General—who at the time was Robert Shevin. So, the case that went to the U.S. Supreme Court was styled, Fuentes v. Shevin. My Debtor/Creditor Class professor made a point of calling on me to “give” that case in our class. So, I was pre-ordained to practice debtor/creditor law.*
Since that time, legislatures and courts have been expanding the rights of debtors to oppose collection through attachment and garnishment. As mentioned in a previous blog, the Federal Trade Commission has enshrined some of these protections in its Credit Practices Rule. Also, legislatures throughout the USA have been expanding the exemptions that debtors may assert to protect their assets against attachment and garnishment. As a result, creditors have lost some of the tools that made judicial collection more likely.
Several years ago, Alabama judges began to accept debtor-counsels' argument that debtors were entitled to use the personal property exemptions available under Alabama law to protect wages in garnishment actions. This did not ring true to the creditor's bar, as personal property exemptions were intended to protect debtor's property; and, Alabama, as well as federal law, had a separate statute exempting wages. Debtor-counsels' argument seemed to us to be confusing fruits and vegetables—and wages and salaries are just not tomatoes.
The Alabama Legislature responded to this line of cases by clarifying that our law does not equate wages and salaries to be personal property. Debtor's counsel has pushed back, claiming that the law is unconstitutional. We are a few years out from the passage of this law. And, creditors' counsel are still awaiting the definitive ruling sustaining the constitutionality of the law. We remain confident that the right case and right set of facts will prove us right.
Practice Pointer: If you have a garnishment case that concerns a contracted debt incurred after the effective date of the new law, you have every right to expect that your writ of garnishment should be judged under the standards of the new law.