This case study will examine a hypothetical small claims judgment that our office collects. The judgment was entered on January 1, 2018, for the small claims limit of $10,000 (see RCW 12.40.010). Though the judgment was entered at the start of 2018, this hypothetical client waited until January 2021 to hire Garnishment Gurus. The debtor didn't magically pay the debt, which they usually don't!
Off to the races!
After hiring us, we quickly discover the debtor is employed making a little more than $40,000 per year. We quickly commence garnishment on January 25, 2021. After calculating required exemptions and taxes each garnishment lasts for 60 days and collects $1,600. This process repeats itself with some added costs being added to the judgment for each garnishment - $390 for each garnishment.
It takes 13 garnishments bringing in $1,600 each (except the last one which pays off the judgment). Thus, $5070 is added back to the judgment for costs incurred including $3,900 which is the amount always added to a judgment as attorney fees (an amount set decades ago - write your legislature to increase it!). The last payment from a garnishment is in February of 2023.
In total the debtor pays as follows:
Total payments | $20,340.00 |
Total applied to costs: | $5,070.00 |
Total applied to interests: | $5,270.70 |
Total applied to principal: | $9,999.30 |
Attorney fees actually incurred under a standard 1/3 fee agreement: $6779.32.
Total recovery to client: $13,569. Not bad for a $10,000 judgment.
Can the client recover even more?
"But," the client says, "the statute says the other side should pay for attorney fees incurred! I paid almost $6800 but only $3900 was awarded under the garnishment law."
The client is technically correct. RCW 12.40.105 provides that a small claims creditor is entitled to attorney fees incurred. That amount is not fixed under the small claims statute like the garnishment statute is. At this point it would be possible to ask the judge to award the additional $2,900 in fees. The Court might or might not grant some or all of that amount. The judge has discretion and can easily see that the $10,000 judgment had $20,340 in payments made already with over $10,000 being recovered by the client. In that circumstance the judge is likely to exercise her discretion and not award further fees.
Remember Garnishment Gurus makes recoveries like this possible. If you have a judgment that needs enforced, please reach out to us.