April 23, 2020: Under Indiana law, the Indiana Supreme Court has supervisory authority to issue Orders to protect the public interest on an emergency basis. Earlier this month, the Indiana Supreme Court invoked this authority to prohibit Indiana courts from issuing new writs of attachment, civil bench warrants, or body attachments until the expiration of the COVID-19 public health emergency, as declared by the Governor, and to stay any writs, warrants or attachments issued before April 3.
On April 14, 2020, four organizations representing the legal and financial interests of consumers (Indiana Legal Services, Prosperity Indiana, Neighborhood Christian Legal Clinic, and Indiana Institute for Working Families) filed a petition for emergency rulemaking before the Indiana Supreme Court. The purpose of the petition was to obtain an Order from the Indiana Supreme Court protecting the stimulus payments to individuals from attempts by private creditors to attach or garnish those payments during the COVID-19 emergency. To review the Order click here https://www.in.gov/judiciary/files/order-other-2020-20S-MS-258a.pdf
On April 20, 2020, the Indiana Supreme Court issued a second COVID-19 related emergency Order in response to the petition for relief. The Order is effective immediately and remains in effect until the expiration of the COVID-19 public health emergency as declared by Governor Holcomb, or until this Court may earlier order. The Order includes two protections:
- Courts shall issue no new orders placing a hold on, attaching, or garnishing funds in a judgment-debtor’s account in a depository institution if those funds are attributable to a stimulus payment, except that this prohibition shall not apply to judgments or orders for payment of child support; and
- As for any previously issued court orders placing a hold on a judgment-debtor’s account in a depository institution, the judgment-debtor shall be entitled, upon request, to a hearing (either in-person or remotely, as local circumstances permit), within two business days of the court’s receipt of said request, to determine what funds in the account are attributable to a stimulus payment and for the judgment-debtor to assert any exemption(s) under state or federal law.
So, what does this all mean?
Indiana now has two Orders in place during the COVID-19 state of emergency inhibiting the ability of judgment creditors and the law firms and collection agencies who act on their behalf to satisfy a judgment. First, courts are prohibited from issuing new, writs, warrants or attachments and are obligated to stay enforcement of any writs, warrants or attachments issued before April 3. Second, with regard to any previously issued holds placed on consumers’ accounts, courts must respond within two business days to a consumer’s request to determine if funds in their account includes any stimulus payments.
This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.