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Bank Accounts with Non-Exempt Funds Can be Garnished to Satisfy Court Ordered Installment Payments

Chase Bank USA, N.A. v. Arborio, HHBCV106005850, 2011 WL 1734448 (Conn. Super. Ct. Apr. 7, 2011)

In a case before the Superior Court of Connecticut, a judgment debtor filed a claim to exempt her bank accounts from execution to satisfy court ordered installment payments pursuant to a judgment against her.  The court disallowed the claim for exempt funds from execution.

The Case

In November 2010, the plaintiff obtained a judgment against the defendant for credit card debt and received a weekly installment payment order to facilitate payment of the judgment.  The judgment debtor made timely payments for the first six weeks, and then failed to make payments for two consecutive weeks.  After the second payment was missed, the judgment creditor complied with the provisions of the financial institution execution statute, Conn. Gen. Stat. § 52-367b, and caused an execution to be served on the bank where the judgment debtor had two bank accounts.

The judgment debtor filed an exemption claim form and the court conducted an evidentiary hearing.  During the hearing, the court found that the judgment debtor did not comply with the installment order.  Evidence in the record disclosed that no checks were mailed to the judgment creditor’s attorney for two weeks.  Therefore, the financial institution execution was properly issued.  The judgment debtor then argued that the exclusive remedy for failure to comply with an installment payment order is the issuance of a wage execution pursuant to Conn. Gen. Stat. § 52-361a.

Actions Taken in Cases of Noncompliance

In Connecticut, post-judgment enforcement in the event of noncompliance with an installment payment order is governed by three sets of statutes:  the installment payment statute, Conn. Gen. Stat. § 52-356d; the wage execution statute, Conn. Gen. Stat. § 52-361a; and the financial execution statute, § 52-367b.  The installment payment statute provides that, in the event of noncompliance with the order, the judgment creditor may apply for a wage execution. Conn. Gen. Stat. § 52-356d(d).

The Superior Court refused to read this provision as defining a wage execution to be the exclusive remedy for noncompliance.  The installment payment statute also provides that, in the case of a consumer judgment, a court may provide that compliance with the installment payment order stay property execution or foreclosure pursuant to the judgment.  Conn. Gen. Stat. § 52-356d(b).  The Superior Court interpreted this language as permitting property executions other than wage executions to satisfy the judgment, which strengthened their assertion that a wage execution is not the exclusive remedy for noncompliance with an installment payment order.

Furthermore, the financial execution statute permits execution “against any debts due” except to the extent that such debts are protected from execution because they are exempt personal property, such as assets or payments received from a trust, insurance contract, pension plan, retirement account, or medical savings account.  Conn. Gen. Stat. §§ 52-367b(a), 52-352b(m), 52-321a(a).

The Decision

Construing the three sets of statutes together, the court concluded that the statutory scheme does not compel the judgment creditor to choose wage execution as its first option for post-judgment enforcement in the event of noncompliance with an installment payment order.

The Superior Court held that a wage execution is not the exclusive remedy for noncompliance with an installment payment order.  Unless the funds in the subject bank accounts were exempt or there was a stay imposed pursuant to the installment payment statute, the judgment creditor may use a financial institution execution to garnish the judgment debtor’s property without first electing to apply for a wage execution. Therefore, because the funds in the bank accounts were not exempt and no stay had been imposed, the judgment debtor’s claim for exemption from a financial institution execution was disallowed.