Garnishment in Illinois is a remedy available to creditors for any debt, including debts resulting from torts (like professional malpractice or auto accidents), breach of contract, credit cards, promissory notes and loans, taxes, and child support or alimony. It is when a third party having control or possession of money belonging or owed to a debtor is ordered to turn over some of that money to a creditor, to satisfy the debt. One of the best known kinds of garnishment is wage garnishment, which is when part of a debtor’s wages or salary is sent to a creditor.
A common misconception—and one that many creditors do nothing to dispel—is that a creditor can do this on its own. In fact, it can’t; there must first be a legal determination that the debt is valid, which typically means the creditor needs a court judgment in its favor. That in turn means that the creditor has to sue the debtor and win, in order to establish a legal right to the money. (There are limited exceptions, such as for tax authorities like the IRS, where an actual lawsuit is not necessary as a precedent for garnishment.)
Illinois Garnishment Exemptions and Non-Exemptions
Not all income or earnings are created equal: some have exemptions from garnishment, which means they cannot be garnished. (Typically, income earned by working is the least protected kind of income, which raises the question of whether, as a society, we value money earned by working less than money obtained through other sources, such as through public benefits.) These exemptions are created by state or federal law. Illinois is protective of debtors, and has carved out a more types of exempted non-wage, non-salary types of income than many other states:
- Social Security: under federal law, it can only be garnished for child support, alimony, federal taxes, and certain other debts to the federal government.
- Pensions: not only are public (state, county, and municipal) employee, including teacher and police, pensions protected as in most states, but retirement benefits generally are protected from garnishment.
- Public assistance or benefits: many forms of public assistance or benefits are protected from garnishment, including workers’ compensation; unemployment benefits; aid to families with dependent children; veteran’s benefits; general assistance; and aid to the blind, aged, and disabled.
- Insurance benefits: many insurance benefits are also protected, including life insurance and annuity proceeds in many circumstances, or health and disability benefits.
- Alimony or child support: up to the level needed for support.
In Illinois, if you are receiving some non-wage or non-salary income—especially retirement-related—there is a good chance it is exempt from garnishment
Illinois Maximum Threshold
Illinois allows less of a debtor’s income to be garnished than is permitted under federal law or in most other states (i.e. Illinois protects more of a debtor’s income). In Illinois, the lesser of the following could be garnished:
- 15% of disposable income (under federal law, it is 25%)—note that this is in total, not per garnishment, judgment, claim, or creditor
- The amount by which a debtor’s weekly income exceeds 45 times the minimum wage (under federal law, it’s only 30 times)
The second criteria is fairly straightforward: in order to allow the debtor something to live on, he or she gets to keep the equivalent each week of working at least 45 hours at minimum wage. (Of course, since after 40 hours a person would get overtime, in reality, it’s the equivalent of working 43 1/3 hours at minimum wage—40 hours straight time, 3 1/3 hours at time and a half.)
However, what does the first criteria mean? It doesn’t mean what you probably think it means: in everyday usage, “disposable income” is income left over after all necessary expenses, such as food and shelter. It’s often used as effectively synonymous with money available for recreation/entertainment, savings, or investment. For garnishment purposes, though, disposable income is income left after taking out only legally required—and only legally required—deductions. The main such deduction is FICA; since even FICA amounts to only a few percentage points of income, in practice, most of a person’s paycheck or other income will be considered “disposable income” and will be potentially available for garnishment.
Also, adding to the complexity—and pain—of garnishment, there are certain debts, such as for taxes or child support, where much more of the debtor’s income can be garnished.
Illinois Statute of Limitations
There are two different statutes of limitation to consider or comply with for any garnishment. The first is the statute of limitations relating to the underlying debt on which the garnishment is based. In Illinois, for the most common consumer debts, the statutes of limitation (or time to sue) will be:
- Five years, for open accounts (credit cards) and oral/verbal contracts
- Ten years, for written contracts
These limitations periods are longer than in most states (especially for written contracts), giving creditors more time to use. However, whenever a limitation period has run out, the creditor can no longer sue on the debt. If the creditor cannot sue, the creditor cannot garnish.
What about if the creditor already has a favorable judgment? In Illinois, the creditor has essentially a generation—20 years!—in which to seek to enforce the judgment, such as by garnishment. This means the creditor can afford to be patient, and wait (years, if necessary) until a no- or low-income debtor starts earning more before seeking to wage garnishment.
Writ of Garnishment in Illinois
The difficult, expensive, and time-consuming part of garnishment is getting the initial judgment, or court determination that the debtor has to pay the creditor. Once that is done, the process of garnishment is very straightforward. Furthermore, garnishment is normally mostly between the creditor and the garnishee (which is the third party with possession or control over some of debtor’s money)—if the legal process worked as it should have, the debtor already had its chance to dispute the debt, during the preceding litigation when the creditor was seeking a monetary judgment against the debtor.
Armed with the judgment in its favor, the creditor applies in writing to the court for garnishment. The creditor needs to state that—
- money is due to it on a judgment
- the debtor has not paid
- it believes that garnishment is necessary to satisfy the judgment
- the garnishee (such as the debtor’s employer) has money available which it owes to the debtor (such as debtor’s salary or wages)
- the money in the garnishee’s possession can be used to satisfy the debt
The debtor will have notice of the garnishment, but unless there was some error or mistake, it only has very limited grounds to challenge or interfere in the garnishment. The garnishee itself also only has very limited grounds to challenge matters, too—it cannot challenge the creditor’s fundamental right to seek garnishment, but can challenge any incorrect facts forming the basis of the garnishment, such as:
- it pays the debtor less than creditor believes
- debtor no longer works for the garnishee
- the garnishee cannot identify the debtor from the documentation
Assuming, though, that the judgment is valid, and that the garnishment is based on the correct facts vis-à-vis any money of the debtor’s in the garnishee’s possession, garnishment will most likely be ordered. More on Stopping Wage Garnishment in Illinois.
Getting Legal Help
(1) the underlying judgment was fully and fairly litigated within the statute of limitations;
(2) the garnishment was brought properly, within the statute of limitations
(3) no mistakes or miscalculations have been made
(4) the debtor’s income (the income which creditor is seeking to garnish) is nonexempt (i.e. it’s not protected from garnishment) and the debtor is not already being garnished at or near the maximum limit
—then there are few (if any!) grounds to challenge the garnishment. However, if there is reason to think that there’s a problem with (1) – (4), or with any other procedural basis for the garnishment, the debtor may be able to fight, or at least reduce, the garnishment. Since most of the grounds for challenging a garnishment are essentially procedural or technical, debtors who want to fight garnishment should retain an attorney to help, rather than doing it themselves.