Arizona Wage Garnishment Laws

Wage garnishment in Arizona is a remedy available to creditors—which means that it is a way that creditors, or people who are owed money, can look to collect from debtors, or people who owe them money. Specifically, wage garnishment is when a creditor has the right to have part of the debtor’s wages or salary sent to the creditor, to satisfy the debt.

Creditors can’t do this on their own. Creditors (other than a tax authority, like the IRS) need court orders to garnish wages; to get those court orders, they need legal judgments in their favor. That means that the creditor has to sue the debtor and win, in order to establish its right to the money.

Garnishment is available for any debt, including debts resulting from breach of contract, malpractice, auto accidents, slip-and-fall cases, promissory notes, etc. Its most common usages are for consumer debts (including credit cards), alimony and child support, and taxes.

Arizona Garnishment Exemptions and Non-Exemptions

All states honor the minimum federal exemption for Social Security (they have to—it’s federal law): Social Security can only be garnished for alimony, child support, federal taxes, and a few other debts owed the federal government

States also have the right to establish their own garnishment exemptions, determining certain types of income which cannot be garnished. Arizona has exempted a variety of non-wage or non-salary sources of income from garnishment, but they essentially break down into three main categories:

  • Certain state or local pensions, such as those of police officers, firefighters, and other public safety personnel; state employees; Board of Regents members
  • Many forms of public benefits or assistance, such as workers’ compensation, unemployment benefits, and welfare benefits
  • Some insurance benefits, such as health, accident, or disability benefits; group life insurance proceeds; or life insurance proceeds if the beneficiary (who is also the debtor) is the insured’s spouse or child, up to $20,000

Remember that if it is not specifically exempted, it may be garnished. That includes payments from private employer pensions, for example.

Arizona Maximum Threshold

Arizona follows federal law: the lesser of the two following may be garnished:

  • The amount by which a debtor’s weekly income exceeds 30 times the minimum wage; or
  • 25% of disposable income

The first rule or criteria is straightforward: to allow the debtor enough to live on, he or she gets to keep the equivalent each week of working 30 hours at minimum wage.

“Disposable income” for garnishment purposes is income left after legally mandated deductions from a paycheck. Since there are only a few of these—e.g. withholding; FICA; unemployment contributions; state employee retirement contributions—most of a person’s income will be considered “disposable income” and be subject to garnishment. Other elements that in common parlance or usage would be considered in determining someone’s disposable income, such as food, rent, health insurance, etc., are irrelevant for garnishment purposes. As a rough rule of thumb, it’s safe to assume that for the middle class and above, 25% of around 90% of income could be garnished.

That’s not 25% of income for each debt or garnishment: it is 25% total of disposable income that may be garnished at any time for all debts.

However, note that the 25% rule is for most debts. There are a few specific debts, like tax debts or child support, where more of the debtor’s income can be garnished. For example, depending on the exact circumstances, half or more of a debtor’s income could be garnished for child support.

Arizona Statute of Limitations

A statute of limitations is the time to bring a legal action. There are two types of statutes of limitation relevant to garnishment. The first is time to sue over the underlying debt that garnishment is based on. This differs by the cause of action, though the most common consumer debts will be three years (open accounts, such as charge cards) or six years (most contracts). This is important because if it’s too late to sue, it’s too late to garnish.

Once the creditor has successfully obtained a favorable judgment, Arizona doesn’t let him, her, or it rest on his/her/its laurels or hands. In Arizona, a creditor only has 5 years to act on a judgment rendered by an Arizona court, or 4 years to act on a judgment entered by a “foreign” court. (In the law, “foreign” is any place but your own state, so California and Texas, for example, would both be “foreign” to Arizona.)

Writ of Garnishment in Arizona

Garnishment is the second step, after the creditor has won in court. The debtor has already had an opportunity to defend him- or herself (and lost), so the debtor’s involvement in garnishment is minimal. Instead, the process involves the creditor, armed with its favorable judgment, making a written “application” to the court. The application will set out all the critical elements for a garnishment: the creditor has a judgment for money and believes that certain identified garnishees (such as the debtor’s employer) have money owed to the debtor which could be used to pay creditors.

A writ of garnishment is then served on the garnishee, putting the garnishee on notice that the creditor is seeking to garnish debtor’s wages. The garnishee can’t challenge or fight the idea of garnishment; it can only challenge the proposed garnishment on the basis that the amount calculated is wrong, the debtor no longer works there, or that it can’t identify the debtor from the documentation. In other words, it can challenge factual inaccuracies, but not the basic obligation to garnish wages.

Once the garnishee has answered, assuming that it does in fact owe money to debtor (such as debtor’s wages), it will ordered to turn that money over for creditor. Debtor him- or herself does not get involved in the garnishment process; it’s a back-and-forth between the creditor, garnishee, and court.

Getting Legal Help

When faced with garnishment, it can be worthwhile to seek legal help. Even though the creditor already has a judgment in its favor, there are ways to attack the garnishment. Learn more about Stopping Wage Garnishment in Arizona. For example:

  • Challenge the validity of the underlying judgment on which the garnishment is based, though this may be impossible if case was fully and fairly litigated before. If there were procedural problems with the judgment—such as, for example, it was rendered in creditor’s favor “by default” because debtor never received proper notice—this becomes more practical.
  • Show that calculation of the debtor’s disposable income is incorrect and that the amount of the garnishment has to be reduced. One way to do this by showing that significant portions of the debtor’s income come from exempt sources.
  • Show that other obligations (e.g. child support) already have the debtor being garnished at the maximum rate, so that the debtor can’t pay anything more.
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