Garnishment is one way that a creditor can seek payment from a debtor who is not voluntarily paying a monetary judgment (or court determination of an obligation to pay money). In garnishment, the creditor doesn’t look to get the money owed it directly from the debtor; instead, the creditor gets an order requiring a third party, called a garnishee, to turn over to it money in the garnishee’s possession or control which belongs to the debtor. Any money belonging to a debtor in the control of a third party can be garnished; when the garnishee is the debtor’s employer, and the money owed debtor is his or her wages or salary, then it is called wage garnishment.
Virginia Garnishment Exemptions and Non-Exemptions
Federal law provides exemption for Social Security from most garnishment: it can be garnished only for child support, alimony, and a few federal debts, such as for income taxes.
Virginia also establishes other exemptions to garnishment—other sources or types income which are protected from being garnished.
- Pensions or retirement benefits: many public worker pensions, such as those of city, town, and county employees, are protected from garnishment—anyone receiving a public pension in Virginia should check to see if it is exempt.
- Public benefits or assistance: many such public benefits, such as unemployment compensation, worker’s compensation, aid to families with dependent children, general assistance, crime victim’s compensation, and aid to the blind, aged, and disabled, all enjoy at least partial protection from garnishment.
- Insurance or annuities: many types of life insurance benefits or proceeds (e.g. group life, cooperative life), accident or sickness benefits, and fraternal society benefits, all have exemptions from garnishment.
Virginia Maximum Threshold
Even those sources of income which are not exempt—such as wages and salary—can be garnished entirely. Instead only a certain percentage of a debtor’s income is subject to garnishment. In Virginia, for most debts, only the lesser of the following can be garnished:
- A total (for all garnishments) of 25% of disposable income; or
- The amount by which a debtor’s weekly income exceeds 30 times the minimum wage
In this, Virginia is paralleling federal law on the subject. When calculating how much of a debtor’s income is potentially subject to garnishment, “disposable income” is income after any deductions mandated by law, such as FICA. In that, it does not track the usual meaning of “disposable income,” which is income after all necessary or required expenses, such as food or shelter. Instead, most of a person’s income will be considered “garnishment disposable income.”
The 25% threshold sets a reasonable ceiling for consumer, contract, or most law-suit-related debts. However, certain debts will allow much greater garnishment. For example, up to 50% (or more) of a debtor’s income could be garnished for child support or tax obligations.
Virginia Statute of Limitations
How long someone has to sue or bring a legal action (such as to enforce a judgment) is known as the statute of limitations. In Virginia, the most common statutes of limitations relating to garnishment are:
- Oral/verbal contract or open account (e.g. credit card): 3 years
- Sale of goods: 4 years
- Written contract: 5 years
- Promissory note: 6 years
- Foreign judgment (judgment from a non-Virginia court): 10 years
- Domestic judgment (Virginia court): 20 years
The last two statutes above are how long someone has to seek garnishment or otherwise enforce a judgment that they received in a previous legal action (such as on a promissory note or credit card).
Writ of Garnishment in Virginia
Garnishment does not determine whether someone owes money—it enforces a previous legal determination of a debt. Also, garnishment is not principally between the creditor and the debtor, but rather between the creditor and the garnishee.
The creditor uses the judgment it previously obtained to ask the court for garnishment. It needs to show the court that it hasn’t been paid on the judgment, so that garnishment is necessary to pay the debt. The creditor will also identify one or more garnishees, like the creditor’s employer(s), who have money owing or belonging to the debtor. Papers will then be served on those garnishees.
The garnishees will have a chance to show that they do not in fact owe the debtor—such as if the debtor no longer works there. But if a garnishee does have some of a debtor’s money, and the debtor owes money to a creditor for a valid judgment, the garnishee will usually be ordered to set some of that money aside for the creditor. More on Stopping Wage Garnishment in Virginia.
Getting Legal Help
The time for the debtor to have challenged the creditor’s assertion that the debtor owes it money was during the previous litigation—when the creditor sued the debtor, won, and obtained a judgment. However, that said, there still are ways that a lawyer can help a debtor dispute a garnishment, such as:
- Mistake in garnishment: wrong party or wrong amount named, etc.
- Garnishment is too late: the statute of limitations for enforcing the judgment has passed
- Garnishment process not being followed: like all legal proceedings, the party bringing the action has to follow the rules; if it doesn’t, the debtor may be able to get the garnishment dismissed, though often the debtor can try to file for garnishment again (following the rules this time)
- Underlying judgment should not have been granted: this is not challenging the merits of the creditor’s case, but rather challenging the judgment on the grounds that the legal process by which it was granted was fundamentally flawed (e.g. the debtor was never given notice of the lawsuit, and so lost by default)
- Most of the debtor’s income is exempt: the more of the debtor’s income can be shown to come from exempt sources, the less the debtor may have to pay.
For more information:
Virginia Code (state statutes)[http://leg1.state.va.us/000/src.htm]
FAQ sheet about Federal garnishment rules[http://www.dol.gov/whd/regs/compliance/whdfs30.pdf]
Social security and garnishment[http://www.ssa.gov/deposit/DDFAQ898.htm]