A wage garnishment occurs when a creditor seizes a debtor’s paycheck in whole or partial satisfaction of a debt. Most creditors must obtain a court order before they may garnish a debtor’s wages.
How Does a Creditor Obtain a Wage Garnishment Order?
If a consumer defaults on any type of debt, the creditor may sue him for the amount of the debt, attorney’s fees, and court costs. If the creditor wins the lawsuit, a judgment will be entered in his favor. Once creditor has obtained a judgment, it has a legal right to collect the debt via wage garnishment, levy, or by any other means authorized by law. Additionally, if a plaintiff obtains a money judgment against a defendant in any other type of civil lawsuit, the plaintiff may use wage garnishment to collect the debt.
How Does Wage Garnishment Work?
In order to garnish a person’s wages, a creditor must initiate a garnishment proceeding by filing a notice of garnishment with the appropriate court. The notice of garnishment must be served on the debtor’s employer. Upon being served with the notice of garnishment, the employer must begin withholding the specified garnishment amount from the employee’s wages until such time as the judgment is paid in full or the employee’s employment ends. The employer must remit all monies withheld to the court which will then disburse those funds to the creditor. If the employee changes jobs, the creditor must initiate a new garnishment proceeding.
Can a Garnishment Be Challenged?
State law governs the procedure for challenging a garnishment. A garnishment can be challenged on a number of grounds including:
- That the debt has been paid;
- That the debt has been discharged in bankruptcy;
- That the debt is not owed by debtor named in the garnishment; and
- That the debtor was never served with the lawsuit which gave rise to the garnishment.
If a debtor challenges a garnishment, the employer is still required to withhold the garnishment amount from each paycheck. However, the court will hold the funds it receives from the employer until the challenge to the garnishment has been resolved.
Does Bankruptcy Stop a Garnishment?
Aside from paying the debt in full, bankruptcy is the only way to immediately stop a garnishment. The automatic stay goes into effect the instant a debtor files his bankruptcy petition and prohibits creditors from initiating or continuing garnishment proceedings.
Getting Legal Help
If you have received notice that your wages are going to be garnished or if they are already being garnished, you should speak with a debt settlement attorney as soon as possible. An experienced debt settlement attorney will explain your legal options for dealing with the garnishment, including negotiating a settlement with the creditor and bankruptcy.