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Initiating a Collections Civil Lawsuit – Wage Garnishment in North Carolina

With the economy still slow, more companies are initiating collections actions for money owed than ever before. When obtaining an attorney for creditor-debtor matters or collections, make sure that you discuss with your lawyer three important questions:

1) Is the filing of this lawsuit going to leverage the debtor into an immediate payment or the formation of a payment plan?
2) Do we have the paperwork in place to obtain a judgment efficiently and cost-effectively?
3) Can we collect on the judgment if it’s obtained?

When handled efficiently, collection civil lawsuits can be an effective means for a creditor to move from the back of the list of creditors who receive payment to the front. With regard to that third question – obtaining payment on the judgment – it’s important to note that North Carolina does have some limitations on how to collect that judgment from individual debtors.

For example, North Carolina generally does not allow wage garnishments. There are some exceptions – including child support awards, taxes and student loans – but generally this easy way to recover a judgment is not available in North Carolina. However, there is some wiggle room here. The NC Department of Labor has set forth that if the judgment creditor obtains a garnishment order in another state against the debtor’s employer, North Carolina will enforce that garnishment order here in North Carolina. So, if your debtor works for a national corporation, of which there are many in the Raleigh, Durham, and Research Triangle Park areas, the debtor may able to secure a garnishment order against the creditor. Consider where your debtor may work in determining whether or not to institute a collections action against an individual.

In upcoming blogs, we’ll discuss important issues with collecting on a judgment against a corporation as well as what paperwork needs to be in place in order to obtain a judgment efficiently and cost-effectively. Maginnis Law, PLLC is a Raleigh business litigation firm that handles civil matters in Raleigh, Cary, Wake Forest, Zebulon, Clayton, and most other local jurisdictions. Maginnis Law handles small business collection cases for money owed and breach of contract. The firm has experience in these actions and can handle the cases efficiently and effectively, without resorting to treating these cases in volume and losing sight of the fact that each case is an individually separate matter and must be treated as such. Contact Maginnis Law, PLLC at 919.526.0450 or visit the firm’s website at to learn more or to schedule an initial free consultation.