GEORGIA COURT RULING IMPACTS GARNISHMENTS
September 14, 2015
The following information was provided to our office by our attorney in Georgia:
We are writing to inform you of a recent Court ruling and how it impacts Georgia garnishments in the near future.
A judgment debtor sued the Gwinnett County Clerk of Court and the law firm that filed the garnishment in the United States District Court, Northern District of Georgia, Atlanta Division, challenging the constitutionality of Georgia’s post-judgment garnishment statute. On September 8, 2015, the District Court issued an Order declaring Georgia’s post-judgment garnishment statute unconstitutional to the extent that it “(1) fails to require that judgment debtors be notified that there are certain exemptions under State and Federal law which the debtor may be entitled to claim with respect to the garnished property; (2) fails to require that judgment debtors be notified of the procedure to claim an exemption; and (3) fails to provide a timely procedure for adjudicating exemption claims.” The judge further enjoined the Gwinnett County Clerk of Court from issuing any Summons of Garnishment using the existing form and procedures that are inconsistent with the decision.
After the Order was issued, the Gwinnett County Clerk issued a statement advising that no Summons would issue in any garnishment action and the Clerk will not disburse any funds pending in the registry of the Court until further direction from the District Court. While the Order is narrowly tailored to personal exemptions, the Gwinnett County Courts have stayed all garnishment matters out of an abundance of caution. Any pending garnishments we have in Gwinnett County, including funds paid into the registry, will be stayed indefinitely.
This Order does not declare all garnishment procedure unconstitutional. As of now, we are only prohibited from filing garnishments in Gwinnett County. This Order seems to be narrowly tailored to consumer judgments, but it remains unclear how the Order will impact other Courts in the State. Because corporations are not entitled to personal exemptions and the order is not applicable to wage garnishments, we feel comfortable filing garnishments in commercial matters in all counties with the exception of Gwinnett. However, we are halting any garnishment filings in consumer claims as this ruling could spark FDCPA violations.
We are closely monitoring this issue and will promptly advise of new developments. The Order will likely be appealed and it is our hope that the Governor will call a special session of the legislature to deal with this issue. Please feel free to contact our office with any questions or concerns.
Simpson, Uchitel & Wilson, L.L.P.
One Securities Centre, Suite 300
3490 Piedmont Rd., NE
Atlanta, Georgia 30305
Telephone: 404/266-2421 ext 104