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MDLaw, Attorney
Category: Business Law
Satisfied Customers: 6135
Experience:  Experience in business law, contract law and related matters.
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I am a consultant. I currently have one customer that pays

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I am a consultant. I currently have one customer that pays me a retainer on a 1099 basis. With a default judgement for a past loan, can that retainer be garnished? I am a New York State resident and my customer is based in Connecticut. Is garnishment based on CT law or NY law?
Hello and thank you for using the JA website. I look forward to assisting you today. Please remember that experts on JA provide legal information and not legal advice.

Just to be clear, you are saying that it is you that has a judgment against you and you have a client who pays you on a 1099 basis. Is this correct? Are you asking if the check that your client writes to you can be garnished before it is given to you or are you asking if the amount you receive for your work can be garnished at all (i.e. once you have deposited it into your banking account)?

Customer: replied 4 years ago.

Yes, the judgement is against me. Default judgement was filed for in California. (where note was established) Yes, I have a Connecticut client that pays me on a 1099 basis. Yes...can the check (retainer) my client pays me be garnished before it hits my bank account. I know that my bank account can also be garnished, as well. I assume that the noteholder needs to establish a judgement in New York to go after my bank account? I assume that they would need a judgement in Connecticut as well? If noteholder can garnish the CT 1099 retainer, does that fall to CT law or to NY law (my residency). I understand that the percentages of wage garnishment are different in CT and NY. Thank you!

Okay, you are actually asking two separate questions and so I will address each one separately.

Since your judgment is an out of state judgment, it can indeed be enforced in New York where you live as long as the proper procedures are followed. Since it was a default judgment, the creditor needs to file a Motion for Summary Judgment in lieu of complaint in NY or start a new lawsuit in New York in order for that judgment to be enforced.

Now, once they get the legal ability to enforce the judgment, they can then pursue garnishment. In order to do that, they courts have to have personal jurisdiction and since you live in NY, that would be NY. Since a client is not an employer they cannot garnish directly from the client. They can, however, garnish your bank accounts, assets, money owed to you, etc.

Please let me know if this has answered your question or whether there is any additional information that you need, David. If this has answered your question, please be so kind as to leave me a positive rating as that is the only way that we experts get credit for having assisted you today. We do not get compensated by the JA website in any way. If, however, you still need more information from me and would like to continue our conversation, please hit the REPLY or CONTINUE button.

MDLaw and 3 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

MDLaw, thank you for the quick response and the direct / efficient answer. My client allows me to use the title of CEO. This is really for marketing reasons so that potential customers of my client respond quicker to my inquiries. I'm assuming that my title is meaningless and that the 1099 status establishes me as an independent contractor and not an employee.

Thank you...and yes, you deserve the highest rating.

Actually, title alone is not dispositive. There are a number of criteria that determine whether or not someone is a 1099 IC or employee. If, for example, someone believes that you are being titled a 1099 to avoid tax or other obligations, then they can request an investigation or dispute that.

Customer: replied 4 years ago.

If I need continued legal support, is it possible to establish a direct relationship? Thank you for your help!

Per the rules of the website, we can only communicate via this forum, David, but you are free to request me should you have a need for legal information in the future. You can either request me directly and/or put MDLaw in the title.
Customer: replied 4 years ago.

Thanks again!

You are most welcome. Thank you for the positive rating and for the bonus. It is much appreciated!