The Wage Garnishment
You may be able to garnish up to 25% of your
debtor's wages if he is gainfully employed. If your court judgment
is owed to you by a debtor who works outside of the home, you may
be able to intercept up to 25% of his or her wages through a wage
garnishment in order to satisfy your judgment. This process is used
in almost every state in the country.
You can garnish wages relatively quickly
for a minimum amount of money if the debtor has a regular job, makes
enough money to be above the poverty line, and has no other garnishments
in place that are senior to yours. Now, there is a possibility that
once the debtor's employer is served with the wage garnishment he
may quit his job. If that happens, you must start all over again.
If your debtor works for himself, in say,
a home-based business, you will have a much harder time trying to
collect on your court judgment. However, there are other tools out
there for you to use to collect. You may use a third party levy or
an assignment order - among other things. Those court procedures
are discussed in other articles on this site.
Your debtor may also file a claim of exemption.
This is simply his objection to the garnishment, and you will not
be able to garnish his wages until the case is heard by a judge.
Most debtors will not even bother with this. They will either allow
the garnishment to go into effect - or quit their job.
If you wish to garnish someone's wages, follow
the rules of your local courthouse and you'll soon be collecting
a certain percentage of your judgment every month until it is paid.
Wage Garnishment Exceptions
The Debtor is already subject to another garnishment:
You cannot garnish wages if they are already being garnished by another
creditor, unless (1) the first garnishment takes less than 25% of
the debtor's disposable income, or (2) you have a judgment for alimony
or child support.
The Debtor needs the money for basic support:
The debtor has the right to object to your garnishment on the ground
that she needs the money for her own support or the support of a
spouse or children. The debtor must make this objection by filing
a form with the court.
The Debtor is a federal employee or in the
military: You can garnish the wages of most federal employees,
including someone on active military duty, but the process may prove
cumbersome. You must serve the federal agency for which the employee
works with a form called an Application for Federal Employee Commercial
Garnishment. You can obtain a copy at www.opm.gov/forms.
You must mail the form to the agency's
office. A government publication called the Code of Federal Regulations
(CFR) contains an appendix listing the address and phone number for
every federal agency, indicating the appropriate official to receive
your papers. The CFR is available online at www.access.gpo.gov/nara/cfr/cfr-retrieve.html.
You'll be asked to enter the Title (5), Part (581 or 582) and Section
(501).
The Debtor receives public benefits or payments
from pension plan: Social Security benefits can never be garnished.
Unless your judgment is for child or spousal support, you can't garnish
unemployment insurance, workers' compensation awards, relocation
benefits or disability or health insurance benefits. Garnishing payments
made from a retirement plan is also very difficult. Most retirement
plans contain "anti-alienation" provisions barring the
plan administrator from paying anyone except the plan holder or beneficiary,
such as a spouse. If the debtor receives these benefits, you may
be better off looking elsewhere for payment.
Wage Garnishment Law
A wage garnishment is actually pretty easy to
do. The rules for a wage garnishment are, generally pretty simple.
First, you need to file the proper paperwork at your local courthouse.
You may have to do a little "detective" work to find our
where your debtor works. Hopefully, he has a "real" job
instead of working for himself or, worse yet, working for wages "under
the table." That makes it harder to garnish his wages.
Then, you instruct the sheriff or other local
official (called the "levying officer") the whereabouts
of your debtor's workplace. The levying officer will then serve the
proper paperwork on the debtor's employer. If all goes right, the
employer will withhold up to 25% of the debtors wages and send it
directly to the levying officer. You can stop garnishing the wages
if you and the judgment debtor make an agreement about payment of
the judgment.
Used properly,
a wage garnishment is often a pretty strong reason for a debtor to
make arrangements to pay off a judgment. A lot of people want to
avoid the embarrassment and inconvenience of having their wages partially
garnished. Also, despite a federal law that bars an employer from
firing an employee whose wages are garnished due to a single judgment,
most employees believe that a garnishment won't set well with their
bosses.
Sometimes, instead of getting the debtor to settle,
a wage garnishment could produce the opposite effect and make a debtor
to quit his job or, worse, file for bankruptcy. If you choose to
garnish wages, remember to do your homework on your debtor to see
if he is able to pay off the judgment debt through the garnishing
of his wages.
Wage Garnishment Minimum
Under the latest federal law, the wage
garnishment minimum is not more than 25% of the debtor's disposable
income. If the judgment debtor is also are the poverty line, there
are additional protections. A judgment debtor must be left with a
weekly wage equal to 30 times the current federal minimum wage --
which has been $5.15 since June 2000.
In some states the minimum wage is much higher.
Make sure that you know your state law when it comes to garnishing
wages. This means that the debtor gets to keep the first $154.50
per week and you can garnish 25% of the remainder of his wages.
If your judgment is for child or spousal support,
you can garnish even more of their wages. Usually up to 50% of the
judgment debtor's take home pay. Again, please make sure that you
know the local wage garnishment laws. If the judgment debtor does
not currently support a spouse or child, you can then garnish up
to 60% of his wages (65% if he is 12 or more weeks in arrears.)
Child support laws regarding the garnishing of
wages is very different from a normal garnishment, so makes sure
that you know the rules. There is no automatic protection for low-income
workers.
Many states do have even lower wage garnishment
limits. Call your local sheriff or Marshall's office for your state's
garnishment rules. You might be looking at some additional limitations
or obstacles in certain situations.
If you plan on garnishing someone's wages, make
certain that you know not only the federal rule, but the state and
local wage garnishment rules as well. File the proper paperwork and
let the law take care of everything else.
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