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Can wages be garnished of LLC owner if I have a judgement against him?
Anonymous8 views4 answers
I have a judgment against a LLC. There was a stipulation filed that stated the owner as a individual shall be dismissed from action since the contract was between us and his LLC. It states it is anticipated between us and the LLC that the LLC will be filing bankruptcy. If the LLC does not file bankruptcy we shall receive the requested money that was in the original petition. We received a notification that the bankruptcy did not go through and none of the debts were discharged. Can we proceed with garnishing the owner’s wages? I just wonder how else we would receive the requested money that was in the original petition since the LLC did not file bankruptcy.
You can't garnish the owner's wages because you stipulated that he doesn't owe you anything. You can pursue the LLC's assets by filing for a garnishment against its bank account(s). If you don't know which bank it uses, you can send interrogatories asking where all of its assets are. The LLC must answer your interrogatories. Once you know where the assets are, you can garnish or levy them to satisfy your judgment.
Eric Jerome GoldTrusts AttorneyCalabasas, CACA licensed ·
Given that you stipulated that the owner doesn't owe you anything, you would not be able to garnish the owner. You need to use judgment enforcement tolls that are legally available in your area to enforce the judgment against the LLC. You can levy accounts, attach property, etc. If you need additional guidance, consult with a judgment enforcement specialist.
I agree with the other comments posted. If the LLC filed bankruptcy and then had its bankruptcy dismissed, you can now pursue it again.
I want to point out that if the LLC actually filed for bankruptcy, you can probably get all of the information there is to know about their banks, accounts, and property by looking at the records in the bankruptcy court. You can set up a Pacer account to review the documents at http://www.pacer.gov/ and then through that portal go to the District of Utah Bankruptcy filings and search for the LLC's case (there is a fee, but a single search like this will not meet the minimum fee threshold and therefore use of Pacer for less than about $15 is essentially free). Once you have obtained the schedules, you should know where it has bank accounts and what other property the LLC owns.
If the LLC has cash flow, for example if they keep money on the premises to make change to customers you can do what is called a till tap. It is a writ of execution on the money they have on site.
You are likely to run into problems with the LLC having secured interests against their property and other problems. Depending on how much the debt is, it may save you a lot of hassle, frustration, and wasted time by hiring an attorney to handle your matter. Depending on how confident you are and the facts of the collection action, you could pay or you could arrange for the attorney to keep a percentage of amounts collected.
I would be happy to counsel with you regarding this matter if you wish.
In California there is a procedure to add a judgment debtor if facts are discovered which indicate that the real party should have been the new party. That the new party was the "alter ego" of the named party.
I imagine Utah may have something similar but law does differ between states.
In your case, that may be a hard sell unless there are very siginificant factes of which you were not aware when you made the agreement.
You need to be very careful when getting judgments against small corporations and LLCSs. A lot of people inforporate, run up debts and them walk away. You want the owners on the judgment if at all possible.
I would AGGRESSIVELY go after the assets of the LLC. They may disperse very quickly. You probably need to talk to a lawyer. In California and I suspect in Utah, there are requirements for wrapping up an LLC and you may be able to go after the owners that way if they take all the assets and leave a shell.
Likewise you may be able to sue for fraudulent transfer of the assets and go after the owners that way.
If the judgment is worth something, you will want to get a lawyer and move quickly. Money tends to dissappear quickly.
Good luck
Greg G