Georgia Garnishment Statute Found Unconstitutional

An Atlanta federal court dealt a blow this week to Georgia debt collectors by finding that Georgia’s post-judgment garnishment statute violates both the U.S. Constitution and the Georgia Constitution. In an order entered on September 8, 2015 in Strickland v. Alexander, 12-CV-02735-MHS (N.D.Ga. 2012), U.S. District Court Judge Marvin Shoob granted summary judgment in favor of the plaintiff.

In 2011 the plaintiff (Mr. Strickland) received both a lump-sum workers’ compensation settlement and began receiving Social Security benefits; both are exempt from garnishment under Georgia law. In 2012, Discover Bank obtained a default judgment against Mr. Strickland on an unpaid credit card account. Discover then filed a garnishment against Mr. Strickland in Gwinnett County, serving the garnishment on the bank where Mr. Strickland held his remaining workers’ compensation funds in savings. The bank complied with the garnishment by freezing the funds in Mr. Strickland’s account. 

Mr. Strickland contacted Discover’s attorneys to advise them that the workers’ compensation award funds were exempt, to no avail, and the garnished funds were eventually paid into the Gwinnett County court. Mr. Strickland sought help from the Atlanta Legal Aid Society which filed a claim for the garnished funds paid into the State Court’s registry. The day before a hearing on the garnishment, Discover dismissed the garnishment and, nearly four months after his exempt funds were wrongfully garnished, Mr. Strickland’s money was returned to him.

In the meantime Mr. Strickland, through his Atlanta Legal Aid attorneys, sued the clerk of the Gwinnett County State Court, Discover, Discover’s attorneys, and Mr. Strickland’s bank in federal court, challenging the constitutionality of Georgia’s post-judgment garnishment statute. Mr. Strickland claimed, among other things, that the statute violates  judgment debtors’ due process rights under the U.S. and Georgia constitutions because (a) it does not require that a judgment debtor be given notice of available exemptions from garnishment, (b) it does not provide a prompt procedure for a judgment debtor to claim their exemptions, and (c) it does not require notice to the debtor that the garnishee (the institution or party on which the garnishment was served) had filed an answer to the garnishment, even though the statute also provides that a debtor only has 15 days from the filing of an answer to “traverse” (dispute) the garnishment. 

After lengthy proceedings, the Court agreed with Mr. Strickland, finding the Georgia garnishment statute unconstitutional and entering an injunction barring the State Court of Gwinnett County from issuing garnishment summons using the existing, unconstitutional forms and procedures. The injunction awarded by the Court, for the present time, only has effect in Gwinnett County, but the decision has left creditors’ attorneys reeling and the clerks’ offices of courts around the state scrambling to devise forms and procedures that pass constitutional muster. 

Creditor judgments and post-judgment garnishments are and, despite this recent ruling consumer-friendly ruling, likely will remain a pervasive problem for Georgians experiencing financial distress. Since 1986, our top-rated attorneys have represented metro Atlanta individuals and businesses seeking relief from their burdensome debts through thoughtful counseling, careful planning, and creative lawyering. Contact us today to discuss the options available to you.