I am not a lawyer, I am a judgment broker. This article is my opinion, based on my experience in California, and laws vary in each state. If you ever need legal advice or a strategy to use, please contact a lawyer.
There can be bad apples in every group, and pastors and churches have their share. When you have a civil money judgment against a church or a pastor, there may be two extra challenges:
First, there may be a hesitation by some to enforce a judgment against a religious person or entity. This should not be an issue, because the bible reminds us, in Romans 13:8, that we all reap what we sow, and “Let no debt go unpaid”.
Next, there is the problem that most churches are tax-exempt corporate or LLC entities that can sometimes hide the assets and/or actions of their Pastor and other important staffers at churches.
As an example, what if you have a landlord/tenant (also known as unlawful detainer) judgment against a pastor of his own church. The church is a corporation, and the pastor’s wife works there, and even their kids work there doing “contract labor”. The church owns several properties including the nice house the pastor and his family live in.
If one tried to garnish the pastor’s wages by serving the church corporation, they would likely answer that the pastor is a volunteer, not a paid employee. This is now a tough judgment, because only the pastor is named as a judgment debtor, not the church itself.
Even if the church corporation itself was named a debtor on the judgment, there could be corporate shenanigans that could make a judgment recovery difficult. If the judgment was against the church, one could have the sheriff levy the collection plates as they are taken to the back of the church. One could also have the sheriff levy other assets of the corporation.
However, if your judgment is against the pastor only, and the judgment is small, one might be better off to give up, unless they can spend a lot of time and money, or make it a learning experience, or for the “principal of it”.
If one performed debtor exams, with document production requests on the debtor and the officers of the entity, one might discover interesting things. Perhaps, the church is paying the pastor’s credit cards, cable bill, insurance, car payments, and more – instead of paying him a conventional income. In California, a judgment debtor exam creates a one-year “silent lien” on all their personal property, which might make you a secured creditor if they later file for bankruptcy protection (which then is only a chance to be paid).
It is not cheap or easy to pierce a corporate veil. You might need an attorney’s help to prove this in court. If the pastor is using the corporation as his personal piggy bank, then the corporate assets may be subject to a levy. To prove alter-ego, you must prove that the supposed non-profit corp is really just a piggy bank for the “pastor”. There are example Motions and Pleadings available for you to work from, and you just plug in your fact pattern. For example, this case: Minno v. Pro-Fab, Inc., 121 Ohio St.3d 464, 467, 905 N.E.2d 613 (Ohio 2009):
“When a shareholder exercises such control over a corporation that the corporation becomes the shareholder’s alter ego, and when the shareholder misuses his control of a corporation to commit specific, egregious acts that injure a third party, then it is unjust to allow the shareholder to use the corporate form as a shield to escape the consequences of those wrongful acts.” (citing Belvedere, 67 Ohio St.3d at 289, 617 N.E.2d 1075).
Use Google Scholar, and search for “alter ego”.
If the pastor has “imputed income”, where payments of his expenses and costs of living are considered income attributable to him, they probably have a monetary value. If so, 25% of that value could be going to you through the Sheriff, the same as the 25% that a California wage levy is; would be a reasonable percentage to ask for on an assignment order.
Corporate entities cannot simply pay for a debtor’s expenses and support him and his lifestyle, and then successfully claim that he is only a volunteer, because that could be considered imputed income for the debtor.
In theory, a lawsuit could make the church (or any company paying a debtor with imputed income) pay what they would have paid on a successful wage garnishment. Of course, when served with a new creditor’s lawsuit, most corporate entities would encourage the debtor to satisfy the judgment immediately.
If you have the time and money, or want to make it a learning experience; you can try to make the debtor, or their imputed income employer, pay off the judgment by proving imputed income, or that the corporate entity is a sham, or a personal piggy bank of the judgment debtor. This can be expensive and might require a receiver and turnover orders and other non-trivial and possibly expensive recovery tactics.
Visit your law library, or research your state case law or codes on the subjects. You might find pleadings or motions that could easily become a template for your case. If you do this Pro Per, have an attorney review your motions, to minimize the chance of a judge’s objection. Some judgment recovery experts have filed a motion to show cause why those that benefit from imputed income should not treat the benefits as earnings, that may be attached by an earnings withholding order.
Sometimes one must get the head of the church before a judge to explain why they are protecting a pastor, who is not complying with a court order to pay their judgment debt, and that you are asking that the integrity of the court to be upheld. Your milage may vary..