Nebraska Wage Garnishment Laws

Debtors who owe money and don't pay can be faced with garnishment: that is when money belonging (or owed) to the debtor which is in the possession or control of a third party, called a garnishee, is ordered to be turned over to a creditor to satisfy a debt. When the garnishee is the debtor's employer, and the money is the debtor's wages or salary, it is called wage garnishment; however, remember that any money in a third-party garnishee's control could be subject to an order of garnishment.

Who issues the order? The courts. Garnishment is a judicial remedy used by courts to enforce monetary judgments, or legal determinations that one party owes another person money. Judgments are an outcome of lawsuits; when one person sues another over a debt, a contract, or some other cause of action and wins, they may be issued a judgment for money, which garnishment can then be used to enforce. (Note: the IRS has a slightly different process for garnishing wages for unpaid taxes.)

Nebraska Garnishment Exemptions and Non-Exemptions

There are limits on garnishment. The first limitation is that many forms of non-wage, non-salary income are protected from garnishment. (This is called being exempted from garnishment.) Some exemptions are federal:

  • Social Security is exempt from garnishment except for child support, alimony, and certain debts to the federal government, like taxes.

Other exemptions are under state law. In Nebraska the following types of non-wage, non-salary income are protected, or exempt, from garnishment:

  • Pensions and retirement benefits: like other states, Nebraska protects state employee pensions from garnishment. It also protects county employee and school employee pensions as well. In addition, all retirement benefits, including private sector, are protected, at least up to the amount actually needed by the debtor for support.
  • Several kinds of public benefits or assistance are protected, such as: workers' compensation; unemployment benefits; and aid to families with dependent children.
  • Insurance and annuities: life insurance, annuity, and fraternal society benefits are protected, up to $100,000 of value.

Nebraska protects fewer kinds of insurance- or public assistance-related income than other states.

As with Social Security, not all the state exemptions are absolute. Several provide protection from most creditors (including merchants, credit card issuers, and banks), but not from garnishment for child support.

Nebraska Maximum Threshold

A second limitation on garnishment is that only a portion of otherwise non-exempt income may be garnished. Nebraska's law setting out how much non-exempt income is subject to garnishment is slightly more protective of debtors—at least debtors who support a family—than federal law. Under Nebraska law, the lesser of the following may be garnished:

  • 25% of disposable income; or only 15% if the debtor is the head of a household
  • The amount by which a debtor's weekly income exceeds 30 times the minimum wage

In calculating disposable income, only payroll deductions required by law (like FICA) are taken out. No other deductions or expenses, no matter how common or necessary they are, are considered—only legally mandated ones. As a result, most income will be considered "disposable."

It's important to bear in mind that tax debts and child support obligations will allow a larger portion of income to be garnished than other debts. There is less protection for debtors facing these obligations than debtors facing other ones.

Nebraska Statute of Limitations

Before garnishing, creditors first need to obtain a judgment in their favor. This means that they need to successfully sue the debtor, which in turn means they have to commence their lawsuit within the statute of limitations, or time to sue, for that cause of action of debt.

For some of the most common consumer debts, the limitation periods in Nebraska are the same:

  • Open accounts (credit cards), oral (or verbal) contracts: 4 years
  • Written contracts, promissory notes: 5 years

After obtaining its judgment, the creditor gets another 5 years (possibly more; renewing or extending the time period for Nebraska judgments is possible) to seek garnishment or otherwise enforce the action.

Writ of Garnishment in Nebraska

Before seeking garnishment, the creditor has already overcome the main hurdle—it has proven its debt in a court of law and obtained a judgment. After that, while it needs to go back to court to get an order or writ of garnishment, it doesn't need to go through anything like a lawsuit again. Instead, it goes through a process in some ways similar to that involved in eviction, where it's mostly a matter of just completing the paperwork in the right way, rather than having to litigate anything.

The creditor applies in writing to the court for garnishment. The creditor—

1) Proves that it has a judgment in its favor

2) States that it hasn't been paid on the judgment and therefore believes garnishment is necessary

3) Alleges that some garnishee (e.g. the debtor's employer) has money owed to the debtor which could instead be used to satisfy the judgment

The garnishee will be ordered to verify that it has money belonging or owed to the debtor. If it does not, or has less than the creditor believed, it will have a chance to prove it. Once it is determined that it has debtor's money, assuming that the debtor did not succeed in some challenge to the garnishment (see below), the garnishee will be ordered to garnish debtor's income for the creditor. More on Stopping Wage Garnishment in Nebraska.

Getting Legal Help

The time to have challenged or disputed the debt itself was the prior lawsuit, when the creditor obtained its judgment. However, even without disputing the merits of the debt, there are ways that a debtor, with legal assistance or help, can challenge garnishment:

  • If the debt was not properly litigated before, the debtor may be able to overturn it. This might be the case if the debtor had never even received notice of the debt or the lawsuit and so the creditor won "by default."
  • If the original lawsuit or the garnishment was or is being brought too late, they might be barred under the statute of limitations.
  • If there's a mistake in the garnishment, either procedural (the creditor didn't use the correct process, provide the right information, or provide the correct notice) or substantive (the wrong debtor is named, or credit is not given for any payments previously made on the debt), the mistake(s) can be corrected or may provide grounds to negate the garnishment.
  • If the debtor's income can be shown to be exempt, it can't be garnished.

For more information:

Nebraska Revised Statutes[http://uniweb.legislature.ne.gov/laws/browse-statutes.php]

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]

Talk to a Lawyer

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
Get Professional Help

Talk to a Debt Settlement Lawyer.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you