Garnishment

en Español

If you're having trouble paying your bills, you may be in danger of a creditor getting a court judgment against you and garnishing your wages or property. It's best not to bury your head in the sand, but instead learn everything you can to minimize the potential damage of garnishment.

The Judgment/Garnishment Process

A creditor who goes to court and wins a case against you can eventually get what's called a "judgment", a court order detailing how much you owe and the interest rate you must pay on the unpaid amount.

The attorney for the creditor can then get a court order ordering you to appear at what's called "supplemental proceedings", to answer detailed questions about your assets, wages, bank accounts and property.

A creditor must then get an order from the court to garnish your property- that is, take something that belongs to you to pay off the judgment. You'll have the chance to appear in court and explain why the creditor shouldn't be allowed to garnish your property.

A creditor can then take the judgment and garnishment order to the local sheriff, and ask that the judgment be "levied" or "applied." The creditor must have information about where you work or property you might have that could be taken to satisfy the amount of the judgment.

A creditor won't be interested in garnishment if you don't have anything that can be taken to pay the judgment, such as:

• A vehicle
• A regular wage
• Bank accounts
• Real estate (other than your home)
• Investments such as stocks and bonds

You're less likely to have your wages garnished if you're a federal employee, as the process involved is cumbersome and lengthy, and many creditors decide it's not worth the trouble.

Vehicle Garnishment

Vehicle garnishment can lead to repossession in some circumstances.

But in many states, creditors aren't allowed to repossess and sell vehicles if the equity in the vehicle (the amount it's worth minus what's owed on it) is under a certain amount (around $2,000 or a little more in most states).

In many cases, a vehicle dealer takes a lien on the vehicle to secure payment. In that case, garnishment doesn't give a vehicle seller any additional legal rights not already available through lien laws.

Wage Garnishment

A creditor may decide to garnish your wages if you're working steadily at more than minimum wage and don't already have other garnishments against your wages.

The sheriff or other levying official presents your employer with garnishment papers, ordering your employer to take out a certain amount each time you're paid, until the debt is paid off. The law requires your employer to withhold the correct amount from your paycheck or be legally liable for it.

Your income can't be garnished if it comes from:

• Social Security benefits
• Retirement plan benefits
• Public assistance benefits

Unless the judgment is for child or spousal support, your income can't be garnished if it comes from:

• Workers' compensation awards
• Unemployment benefits
• Disability benefits

Under the federal Consumer Credit Protection Act, your employer can't fire you because of the inconvenience of having to cooperate with a garnishment for any one debt. If your employer violates this federal law, punishment can include fines of up to $1,000 and imprisonment for up to one year. But you can be fired for having more than one wage garnishment.

Federal law limits the maximum amount that can be garnished to the lesser of 25 percent of your disposable income (what's left after required taxes and so forth are withheld) or 25 percent of your weekly wages that are over 30 times the minimum hourly wage. Up to 50 percent of your disposable income can be garnished for child or spousal support.

If your wages are already being garnished for another debt, the second creditor can't garnish your wages unless the first garnishment takes less than 25 percent (or 50 percent for child or spousal support) of your wages.

Automatic Stay In Bankruptcy

Filing for bankruptcy can stop a garnishment cold, through bankruptcy's automatic stay process. Filing for bankruptcy allows you to receive your full paycheck, and possibly completely "discharge" (erase) the judgment amount.

Whether or not you can find the cash to pay your debt before it comes to garnishment, it is best to see a lawyer early in the process.

Related Resources