Update on House Bill 30

The Change in Collection Law – Update 6/26

The House of Representatives ended up passing HB30 by the end of its most recent session.  The vote was 83 in favor of the bill with 32 votes opposing it, a wide margin in favor of passage. The most recent session ended with the Senate not voting on the bill, but having passed the House, the bill can be considered in the remaining 2011 sessions and in the 2012 session.  The bill is still very much alive.

Possible Change in North Carolina Collection Law

Introduction of House Bill 30; Allow Wage Garnishment to Satisfy Judgments

Recently, a bill has been introduced in the General Assembly to allow for wage garnishment in North Carolina.  Currently, North Carolina does not allow for a worker’s wages to be garnished to satisfy a judgment, except in very limited situations.  Most times, winning a lawsuit against a person is almost a symbolic move, because there is almost no way to collect on the judgment after it has been rendered.  If you get a judgment against that person, you have to attempt to get the sheriff to seize the debtor’s property and sell it at auction to satisfy the judgment.  If the debtor has little enough property that all of it is exempt from execution (and many people are entirely exempt from execution), then there is no way to get any money out of the judgment.

House Bill 30 would change that state of affairs.  It would allow almost all judgment creditors to garnish up to 15% of the wages of someone who owes them money after a lawsuit.  In addition, there are provisions in the law that would allow a person in financial hardship to avoid being subjected to garnishment.  If passed, the law would be a significant game changer in the area of collections.