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Assignment Order

What Is an Assignment Order?

An assignment order is a court order directing a debtor to assign certain rights to payment to a creditor to satisfy a judgment.

This typically involves directing third parties, such as employers, clients, or other entities that owe money to the debtor, to pay those funds directly to the creditor instead. Assignment orders are often used in cases where a debtor is unwilling or unable to pay a judgment voluntarily.

Assignment Order Explained

When a creditor obtains a judgment against a debtor—such as in a personal injury case where the defendant is ordered to pay damages—they may face challenges in collecting the awarded amount. If the debtor does not voluntarily satisfy the judgment, the creditor can seek legal remedies to enforce it. One such remedy is an assignment order.

An assignment order is a powerful tool for creditors, as it allows them to directly intercept payments that the debtor would otherwise receive.

The process of obtaining an assignment order typically involves the creditor filing a motion with the court. The motion must demonstrate that the debtor has a right to receive certain payments and that those payments are not exempt from being used to satisfy the judgment. The court will review the motion and, if it finds the request justified, will issue an assignment order.

Once the order is issued, it becomes binding on the parties involved. The third party that owes money to the debtor must comply with the order and redirect the specified payments to the creditor. Failure to comply with an assignment order can result in legal consequences for the third party, including being held in contempt of court.

The Term Assignment Order in Different Legal Contexts

Assignment orders are commonly used in civil cases where monetary judgments are involved.

In personal injury cases, for instance, if the defendant is ordered to pay damages but fails to do so, the plaintiff (now the judgment creditor) can request an assignment order to collect payments that the defendant is entitled to receive, such as insurance proceeds or wages.

In family law, assignment orders can be used to enforce child support or spousal support payments. If a parent or ex-spouse is not fulfilling their support obligations, the court can issue an assignment order to redirect payments from their income or other sources directly to the recipient of the support.

Assignment orders are also relevant in business litigation, where a company or individual may owe a significant amount of money as a result of a judgment. If the debtor has accounts receivable or other contractual payments due from clients, the creditor can use an assignment order to collect those funds to satisfy the judgment.

Common Misconceptions About the Meaning of Assignment Order

A common misconception is that an assignment order is the same as garnishment. While both are methods of collecting a judgment, they operate differently.

Garnishment typically involves taking a portion of the debtor's wages or bank accounts, whereas an assignment order redirects specific payments that the debtor is entitled to receive from third parties. Assignment orders are often broader in scope, covering a wider range of payment sources.

Another misconception is that assignment orders can be used to seize all of a debtor's income or assets. In reality, assignment orders are subject to certain limitations.

Some types of income, such as Social Security benefits, disability payments, or workers' compensation, may be exempt from assignment. Additionally, the court may limit the amount that can be assigned to ensure that the debtor retains enough income to meet basic living expenses.

Lastly, some may believe that once an assignment order is issued, it cannot be challenged. However, debtors have the right to contest an assignment order if they believe it is unjust or if the payments in question are exempt from collection. They can request a hearing to present their case, and the court may modify or revoke the order based on the evidence presented.

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Drew Davis Van De Grift

Contracts and Agreements Lawyer Serving at Birmingham - Michigan

1895 Bradford Rd, Michigan, 48009-7253

Thomas M. Cooley
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What Is an Assignment Order?

Assignment Order Explained

The Term Assignment Order in Different Legal Contexts

Common Misconceptions About the Meaning of Assignment Order

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