by Fred Abramson on April 5, 2010
The New York Times reports today that more struggling borrowers are facing wage garnishment than ever before. Because many credit card borrowers decide not to defend their case in court, creditors can win big judgments in court.
I recently wrote an article outlining what you should legally do if your wages have been garnished. You should go into the court where the judgment has been entered and make a motion to vacate the default.
The New York City courts have a strong policy of having cases decided on its merits. Generally you have to prove that your were not served properly and show that you have a valid defense.
Let’s say you moved from Forest Hills to the West Village and never received the summons and complaint. In addition, there was an incorrect charge from Le Bernadine for $650. It looks like someone stole your identity and was having a grand old time dining through the grand palaces of New York haute cuisine. The judge will likely vacate the judgment and remove the wage garnishment. Your case will then proceed and will be decided on its merits.
Even if you do owe the money, you should always defend yourself in court. Here’s why:
- You force the credit card company to prove your debts. When I first started practicing law, I litigated thousands of cases for a large bank. The bank subsequently merged with another bank and the attorney who sent me the cases lost the businesses. The bank usually did not have the necessary paperwork, such as credit card statements, to prove their case.
- Even if the credit card company has the paperwork to prove the debt, if you defend your case the court in New York requires someone with knowledge to testify as a witness. Since many debts are resold to a third party. These third parties may not have a presence in New York. As a result, they may not have anyone who can testify regarding the validity of debt. You may win your case even if you owe the debt.
- Most credit card user agreements allow for huge interest charges, penalties and even attorney fees to be added. In nearly all cases, in New York the judge will strong arm the credit card company to waive the fees.
- Credit card companies understand that there is a difference between obtaining a judgment and collecting on it. It also costs the attorney valuable time to litigate the case in court. As soon as you receive the summons and complaint, a call should be made to the attorney for the credit card company to discuss settlement. It is not unusual to obtain a settlement for a fraction of what you owe.
If you have been sued for a credit card debt, feel free to contact me at the Law Office of Frederic R. Abramson at 212-233-0666.
Wage Garnishment is a very powerful tool for either the government (most commonly the IRS), a company or an individual to collect money damages. If you are a plaintiff in a civil action, if you obtain a judgment you may be able to have the sheriff garnish the wages of the person you are suing.
If your wages have been garnished, the court has the final say on how much money can be withheld from your paycheck. Your employer is powerless to stop your wages from being withheld.
What to do if you do not believe that you owe the money?
- Go to the court clerk’s office in the county where the judgment has been entered. In the file there must be an affidavit of service. The affidavit of service will state the manner in which the lawsuit was served upon you. In New York Civil Court, after a judgment has been entered, the plaintiff is required to file a notice of entry and an affidavit of non-military service. The court protects people serving in the military from being subject to a lawsuit while on active duty abroad.
- If you have not been properly served and you have a valid defense to the underlying action, you may make a motion to vacate default. In addition, you may make an order to show cause to have the wage garnishment removed. It is not uncommon for some law firms to use process servers who “sewer serve.” I reported about this issue a few months back, where American Legal Service was accused by the Attorney General of sewer serving.
- Once in court, the judge may schedule a traverse hearing where the judge will determine whether service of process was proper.
- You also need to move for a motion to vacate default within one year of the judgment being entered.
What should you do if you want to garnish someone’s wages?
- Perform case investigation before starting your lawsuit. If the person you are suing is insolvent, it may not be worth the expense of starting an action against him or his company.
- You must obtain a court order. If you are owed money, in New York you may commence in action in either Small Claim, Civil Court, Supreme Court or Federal Court. The court where you start your lawsuit is dependent among a variety of factors.
- You must then enter judgement with the court. Be aware that in most cases you can recover costs of the action.
- Obtain the name of the employer.
- Bring the judgement to the sheriff. The sheriff will garnish the wages.
The Law Office of Frederic R. Abramson practices civil litigation in New York State. If you have any questions regarding wage garnishment, contact me at 212-233-0666.
by Fred Abramson on March 17, 2010
Wage and Hour lawsuits are rising according to Kiplinger.com. Due to the faltering economy, workers who have been let go are looking to the courts to seek monetary damages. Usually the lawsuits are based upon allegations that hourly workers are not paid overtime. This is a violation of the Federal Labor Standards Act.
According to the article, New York was one of the states that has seen the most significant growth in Wage and Hour lawsuits. Among the reasons why there have been an increase in litigation is because these cases are relatively easy to win. The proof is in the numbers. If you are a worker, you simply have to prove that you worked overtime. This is usually evidenced by a time sheet. Large employers also keep records of employees hours. If the workers paycheck doesn’t match the hours worked, the worker wins. Awards can include two to three years of back pay plus benefits.
The Obama administration is also placing a greater emphasis on regulation and enforcement. As a result, more workers are being notified of Wage and Hour violations.
Here are a few ways that a business can protect itself from Wage and Hour lawsuits:
- All worker classifications should be reviewed. Make sure that you are properly classifying any independent contractors.
- Review all worker wages. Sit down with an attorney to see if you workers are being properly paid. This could save your company millions of dollars. Wal-Mart settled a $65 million dollar claim last year.
- Speak to and train all of your supervisors. Managers often demand workera to work overtime without knowing its implications.
- If there is a problem don’t ignore it. If an employee complains that she has not been paid overtime, take it seriously. Wage lawsuits can be just as costly as sexual harassment litigation.
- Make sure your employee handbook is up to date and addressses wage and hour issues.
- Be aware of the difference between employees who are paid salaries and hourly workers.
Another tip, as Rush Nugut points out is that a business should consider hiring a lawyer during the auditing process as to keep the attorney-client privledge.
I would also like to thank Craig Roberts for his insights regarding this issue while watching our children slide on giant inflatables at a Pump it Up party in Plaiview, Long Island.
If you have any question regarding Wage and Hour Lawsuits, whether you are an employer or employee, contact the Law Office of Frederic R. Abramson at 212-233-0666.
