A wage garnishment is a court order for an employer to withhold funds from an employee's wages to be paid to the creditor claiming the garnishment. Under the order, the employer will withhold the specified amount of funds from the employee's paycheck and turn it over to the individual with the order. If you win your small claims case, you can garnish wages in order to recover the money that you are owed.
Who Can Garnish Wages
Any creditor can seek a garnishment against their debtor. Usual debts include credit cards, auto loans, student loans, or personal loans. A garnishment can also be issued for child support or alimony payments. A government, including the federal government, can garnish your wages for back taxes, but there are stringent rules concerning how they must go about it.
How Does a Creditor Get a Garnishment Order
The creditor must sue in court to get a garnishment order for a money judgment. This judgment will state
- how much is owed
- whether interest will accrue
- what rate during the period the debt is outstanding.
Once the person who is owed money gets a judgment, they can be referred to as a judgment creditor, while the other person is the judgment debtor. The judgment order can be issued by a judge, jury, magistrate, or, in some cases, a court clerk. If the issue is money owed, the judgment is called a money judgment.
To get that order, the creditor must prove that the debtor owes them money and that you are past due in paying it.
After the court issues the judgment, the creditor must wait several days before the decision is entered. Once the judgment is entered, the creditor can get a Writ of Garnishment. A writ is a court order telling another party to do something; in this case, it tells the employer to withhold a portion of the plaintiff's pay and hand it over to the judgment creditor. There will be no garnishment if the debtor pays the debt within 21 days of the judgment.
The writ, once issued, must be served on the employer before its expiration date. Usually, the garnishee (employer) has seven days to serve the employee with the writ by mail or hand delivery. The garnishee employer also has 14 days to send information to the creditor, court, and debtor. The Disclosure states what money the garnishee controls. Employers, of course, control the debtor's wage or salary. If your bank has received a writ, it must disclose that it controls your accounts. Tax refunds and other money must also be disclosed.
Once the Writ is served, the employer withholds the funds from the debtor's account. This means they may have limited access to their money for some time.
How Garnishment is Administered
There are two types of garnishment: non-periodic and periodic. Both can be applied to the same debt.
The periodic garnishment applies to regular payments, salary, bonuses, commissions, and pension payments. There will be a limit, around 25%, to how much can be taken from your pay.
A non-periodic garnishment is usually charged against an account. Sometimes tax refunds can be garnished as well. A debtor can apply to the court for an installment plan instead of the periodic garnishment. However, if the debtor misses a payment after the plan is granted, the creditor can ask the court to reinstate the garnishment.
An employer does not have a choice about the garnishment. They must withhold and turn over the money per the court order.