If a creditor has a judgement but a payment arrangement was already made through the court, can they still garnishthe debtor’sstate tax refund?

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If a creditor has a judgement but a payment arrangement was already made through the court, can they still garnishthe debtor’sstate tax refund?

We have a judgement from a old car loan (from 10 years ago) but have already gone to court and set up a payment arrangement. Now the same place is also garnishing our state tax refund. Is that still done even though arrangements are already made and we are making our monthly payments as set by the court?

Asked on February 18, 2012 under Bankruptcy Law, Michigan

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The best way to answer your question is to carefully read the payment arrangement that you and presumably the judgment creditor signed. If the agreement states that the presumed monthly arrangement to be made is what you are obligated on is the amount to be paid and no garnishment or levy proceedings are allowed so long as payments are current, then the garnishment does not seem contractually allowed.

However, if the agreement is silent as to other ways to get the judgment paid off, then the judgment creditor seemingly can levy on your state tax return to pay off the judgment.


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