What is a garnishment?

In simplest terms, a garnishment is a court order allowing someone to collect a debt by putting a claim on money owed to the debtor that is in the possession of a third person. The most common are claims on wages owed to the debtor or money held in a bank account. Other examples are rent or land contract payments to be paid by a tenant of the debtor or insurance money owed to the debtor.

Any unpaid amounts due under the Judgment plus the costs of collection can be collected. Interest on the part of the Judgment that has not been paid can be added to the unpaid balance. The interest rate that is allowed is published quarterly by the Courts. In addition, the cost of filing and serving the Writ of Garnishment can be added to the total amount due.

In most cases, a writ of garnishment can only be issued after there has been a court case in which a court has issued a Judgment saying that the money is owed and that a specified amount of money is due as of the date of the Judgment. This is why it is VERY IMPORTANT that a Summons and Complaint never be ignored

The person who is owed money has to file a paper called a Request and Writ for Garnishment (MC 12--Periodic or MC 13--Non Periodic) with the same court that issued the Judgment because this is the "collection" part of the same case. After the Judge or Clerk has signed the Writ, one copy is mailed to the garnishee and one copy is mailed to the defendant. The garnishee is the employer, bank or other person who owes money to the defendant--this is the debtor that the Judgment has been entered against.

The garnishee is also required to mail a copy of Writ to the defendant within 7 days. The garnishee is also required to fill out a form called a Disclosure (Form MC 14) (saying how much, if any, money belonging to the defendant is available for garnishment) and return it to the Court within 14 days.

The defendant has 14 days after receiving a copy of the Writ of Garnishment to file Objections. (Form MC 49)   If Objections are filed, the Court will set a hearing date.

The defendant may object to the garnishment for a number of reasons. The ones that the Judge will listen to are:

1. That the property is something that is protected by law from being garnished.
2. That the defendant has filed bankruptcy.
3. That an installment payment order has already been entered by the Court.
4. That the Judgment has already been paid.
5. That there is another garnishment against the same property or payment.
6. The amount exceeds the amount allowed by law.
7. That there is something else wrong in the paperwork, the service, etc.

Some income is protected by law and considered exempt. This means that it cannot be garnished. This includes most government programs and retirement benefits. Specifically, Social Security, SSI, Unemployment, Worker's Compensations, State Disability, State Family Assistance, and TAN-F (Temporary Assistance for Needy Families) and Veteran's Administration checks cannot be garnished. Other pension funds, especially those paid to former state or federal employees, cannot be garnished.

In addition, under federal law, a certain amount of a paycheck is protected. There is a formula to determine this amount. In simplest terms, the most that can be garnished is the lesser of 25% of the amount left after the deduction of state, federal and local taxes and retirement. OR

Amount left after deduction of minimum wage per hour for 30 hours per week.

The money in a bank account cannot be garnished if the source of the money is from a protected income source. However, there may be a problem if money from other sources (for example, the paycheck of another family member, the money from a garage sale) is in the account.

This depends on the kind of joint account it is. In many cases, an account with two or more names on it is considered to be "jointly owned". This means that anyone whose name is on the account can put money in or take money out of the account. In that case, all money in the account could be garnished. If it is another kind of account and, in fact, none of the money in the account belongs to debtor, this can be brought up to the Judge.

Examples of other property that cannot be garnished include money in an IRA, the first $500 in a savings and loan account, and cash value of life insurance policies where the beneficiary of the policy is the spouse or children of the debtor.

Garnishment orders and proceedings can only be used to claim cash assets and income. If property would have to be sold for cash to satisfy the Judgment, there are different procedures called Execution that would need to be followed

If the Court enters an Order for Installment Payments, no garnishment can take place as long as the debtor is making the payments as ordered. A Motion for Installment Payments (MC 15) can be made at any time--even after a Request and Writ for Garnishment has been filed--and allows the debtor to make a reasonable and voluntary effort to make affordable payments.

Federal law provides that a garnishment against wages must leave the person with the greater of 75% of disposable income (Income after taxes) or minimum wage for a 30 hour work week. If another garnishment, including an Income Withholding Order for child support, takes the available income then it is not available to be garnished.

Federal law provides that a garnishment against wages must leave the person with the greater of 75% of disposable income (Income after taxes) or minimum wage for a standard work week

The basic idea of bankruptcy is that all of a debtor's assets are put in one pile and all of his debts in another. The Bankruptcy Court determines which debts are to be paid and then divides the assets among the creditors. In order to make sure that all debts and assets are handled in the single case and that no single creditor gets more than his share, no other Court action for collection can take place while the Bankruptcy Court has the case.

When the bankruptcy case is over, most debts are "discharged". This means that they are no longer owed. Therefore, no action can be taken to collect that debt.

If some or all of the debt was paid after the entry of the Judgment, this can and should be raised. However, if the dispute is over whether the original amount of the Judgment was correct, this cannot be decided at this point.

A periodic garnishment is one that stays in place, collecting parts of the amount owed, over a period of time. This usually applies in situations where a source of income such as a paycheck or rent payment due to the debtor is received over a time span. For example, a person owes $100 and is paid weekly and the maximum allowable is $25 per week. A periodic garnishment would stay in place for 4 weeks taking $25 per week.

A non-periodic garnishment is a one-time attachment of a single pot of money such as a bank account or insurance proceeds.