Being sued by a creditor means the creditor is trying to collect a debt a person owes. If a creditor wins a lawsuit, it’s called a judgment. Once the creditor has a judgment, it can collect the money owed by using an assignment order.
An assignment order is a legal order allowing a creditor to go after property a person owns. This property isn’t subjected to a levy. A levy ranges from a tax refund to an annuity policy or loan value on a life insurance policy that hasn’t matured.
Which Groups of People Are Vulnerable To an Assignment Order?
Typically, self-employed individuals and private contractors have assignment orders against them. The orders are generally used for people who don’t have regular wages to garnish. The orders are generally levied against their accounts receivable.
How Can a Creditor Obtain an Assignment Order?
Once the creditor has a judgment, the creditor goes to court again. This time, it’s to apply for an order prohibiting the debtor from getting rid of any money he has a right to receive. The debtor is given a notice to appear in court. It gives the person the opportunity to fight the assignment order. If the creditor is successful in obtaining the order, the order can be served on whomever paying the debtor. When payment is due, the money is sent to the creditor instead of the debtor.
What Types of Payments Can Creditors Use the Order to Obtain?
Creditors can use the order to obtain:
- Insurance loans
- Tax refunds
- Dividend payments
Can I Prevent an Assignment Order?
Yes, talk to a finance lawyer about preventing an assignment order if you owe a debt. The attorney will advise you of your options like negotiating with the creditor on your behalf to settle the debt.