Wage garnishment is a remedy that allows creditors to recover money from debtors who do not pay them. It is a mechanism by which a creditor gets a court order directing that part of the debtor’s wages or salary should be sent to the creditor for the debt.
(Note that garnishment can apply to any income or money belonging to the debtor which is in the possession of a third party. It is not limited only to wages or salary, though wage garnishment is possibly the best known type of garnishment. )
Creditors cannot garnish income on their own. They need the court system to order garnishment, and to get that order, a creditor (other than a tax authority, such as the IRS) needs a court judgment in its favor. The creditor has to sue the debtor and win, which is what establishes its right to the money.
Garnishment is available for any debt or obligation to pay. Any legal action can result in a judgment which would form the basis for garnishment, including lawsuits for torts or breach of contract, as well as suits to collect on debts owed for cars, consumer goods, medical care, promissory notes, etc. Taxes and support obligations (such as alimony and child support) can also lead to garnishment if not paid.
Mississippi Garnishment Exemptions and Non-Exemptions
Anywhere in the United States, Social Security is almost entirely exempt garnishment. It can only be garnished for child support, alimony, and a few types of debts owed the federal government (primarily taxes). It appears that Mississippi has gone one better than federal law, however, and exempts Social Security from all garnishment.
Other Mississippi non-wage, non-salary exemptions include:
- Pensions and retirement benefits: Mississippi is more protective of retirees than many states. Not only are public and state employee, police and firefighter, and teacher pensions protected from garnishment, but retirement benefits generally, including IRAs and Keoghs, enjoy broad exemptions from garnishment.
- Most kinds of public benefits or assistance are protected, such as: workers’ compensation; unemployment benefits; aid to the aged, blind, and disabled; and crime victim’s compensation.
- Insurance and annuities: fraternal society benefits; life insurance proceeds if the policy states that cannot be used to pay creditors; disability benefits.
Not all these exemptions are absolute. Several provide protection from most creditors (including merchants, credit card issuers, and banks) but not from garnishment for child support. For example, in Mississippi, crime victim compensation can be garnished for child support.
Mississippi Maximum Threshold
Even if income is not exempt from garnishment (like wages and salary), only a portion of it can be garnished— the idea is that to allow the debtor something to live on, the majority of his or her income must be safe from garnishment. All states establish a maximum threshold, or maximum amount of income that may be garnished. Mississippi has chosen to follow federal law on the subject, allowing the lesser of the following to be garnished:
- 25% of disposable income—total for all garnishment, not per garnishment
- The amount by which a debtor’s weekly income exceeds 30 times the minimum wage
Don’t confuse “garnishment disposable income” with “everyday disposable income.” In everyday usage, “disposable income” is that-often-small amount of income left after all necessary expenses, including food, shelter, utilities, transportation, and health care or insurance. However, when determining disposable income for garnishment, only take out legally required payroll deductions (primarily FICA). This means that most of a person’s income will be considered “disposable income” for purposes of calculating allowable garnishment.
Also note that under federal law (which Mississippi follows), certain debts (taxes; child support) allow much much more of a debtor’s income to be garnished. Depending on circumstances, for example, up to 50 % - 60% of a debtor’s income could be garnished for child support.
Mississippi Statute of Limitations
There are two different statutes of limitation relevant to garnishment: the underlying debt or cause of action that garnishment is based on; and for the garnishment itself.
Statute of limitations for underlying debt or cause of action. This generally varies by cause of action; however, for the most common consumer debts, the limitation periods in Mississippi are the same:
- Open accounts (credit cards), oral (or verbal) contracts: 3 years
- Written contracts: 3 years
Garnishment. Mississippi gives creditors another 7 years to seek garnishment or otherwise enforce their judgments.
Writ of Garnishment in Mississippi
A writ or order of garnishment is issued against a garnishee (a third party having possession of the debtor’s money, or owing money to the debtor). It is a court order, which means that to get it, the creditor must take a judgment in its favor (which establishes the creditor’s right to be paid) to the court system and show that it needs garnishment in order to satisfy the judgment.
Once that is done, papers will be served on the garnishee requiring the garnishee to either confirm or dispute that it has money owed to the debtor. Essentially, the only challenge the garnishee itself can raise is to the facts the creditor alleged in applying for garnishment. For example, it can show that it pays the debtor less than creditor thinks, or that debtor is no longer employed by it, or even that it has never heard of the debtor. It cannot, however, dispute the basic right of the creditor to have debtor’s wages garnished to satisfy a valid judgment. Assuming that the garnishee has some of debtor’s money, it will be ordered to set some of that money aside for the creditor. More on Stopping Wage Garnishment in Mississippi.
Getting Legal Help
Garnishment occurs after there has already been a determination of a legal obligation to pay—in other words, the debtor has already had a chance to dispute the debt itself and lost. However, it still possible to challenge garnishment, usually on—
(1) Procedural grounds, relating to either the judgment or the garnishment; regardless of the merits of the debt, proper legal procedures, including especially providing notice in the correct way to the correct parties, must always be followed.
(2) Statute of limitation grounds, if the original debt/cause of action or the judgment is too old.
(3) Mistake, if (as happens surprisingly often), the wrong person’s salary is being garnished, or the garnishment is over a debt that the debtor has already paid.
(4) The amount of income subject to garnishment, if the debtor is deriving income largely from exempt sources.
Since most of these challenges in one way or another turn on legal procedure, the assistance of an attorney to making these challenges is invaluable.