Utah Wage Garnishment Laws

When a debtor refuses to pay a creditor who has a judgment (a court determination) directing payment, the creditor can invoke several mechanisms to recover the compensation due him, her, or it.

One of those mechanisms is something called garnishment. This is when the creditor gets a court order directing a third party which has possession of money belonging (or owed) to the debtor to instead pay that money to the creditor to satisfy the judgment. Wage garnishment is when it is part of the debtor's wages or salary that sent to the creditor for the judgment. Garnishment is a remedy available for any legally recognized debt, including unpaid taxes, alimony and child support, or debts arising from tort claims against the debtor (e.g. from a car accident, professional misconduct, or fraud) as well as for debts created by the sale of goods, promissory notes, credit cards, and contracts.

Utah Garnishment Exemptions and Non-Exemptions

Not all income of the debtor can be garnished. As well be discussed in the next section, a maximum of roughly one-quarter of non-exempt income—such as wages or salary—can be garnished. In addition, many other source of income or money, including pensions, insurance, and public benefits, have been exempted in whole or in part from garnishment.

Federal law creates an exemption for Social Security: it can only be garnished for certain debts owed the federal government (principally taxes), or for child support and alimony.

Other types of non-wage, non-salary income exempt from garnishment in Utah include:

• Pensions and retirement benefits: Utah offers broad-based protection for both public (e.g. state workers) and private retirement benefits or pensions. Any debtor drawing—or soon to draw—income from these sources should consult with an attorney to check whether his or her retirement benefits are exempt.
• Public benefits or assistance: certain types of public benefits or assistance are exempted from garnishment, such as workers' compensation; unemployment benefits; and veteran's benefits.
• Income or annuities: there is broad protection for disability, illness, medical, and hospital benefits, as well as for life insurance benefits under a variety of circumstances. Fraternal society benefits are also protected. Anyone collecting benefits or proceeds from insurance should consult with an attorney to see if they belong to one of the categories which is protected.
• Alimony, support, and maintenance payments: there are protected at least up to the amount or level the recipient(s) need for support.
• Bodily injury or wrongful death: several types of compensation available (including settlements or judgments from lawsuits) for bodily injury or wrongful death are protected from garnishment.

Some exemptions from garnishment are not absolute. Garnishment for child support may be allowed even when other garnishment is not, as is the case with certain retirement benefits.

Utah Maximum Threshold

While Utah has its own law on the subject, setting out the maximum amount of non-exempt income that can be garnished, its standards mirror those of federal law. For all practical purposes, Utah can be treated as if it follows federal law, which provides that the lesser of the following may be garnished:

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

The reason for the maximum threshold is to allow the debtor something to live on—at least the equivalent each week of working 30 hours at minimum wage.

Disposable income for garnishment purposes is ALL income left after legally required deductions are taken out of the debtor's paycheck. No deduction not mandated by law, including such common deductions as health insurance or 401(k) contributions, is considered; and no expenses, no matter how necessary (including food, shelter, and transportation), are taken into account. Since there are not that many legally required deductions (FICA is the principal one), most income will be considered to be "disposable" and will be potentially subject to garnishment.

Note that debts for taxes or child support can result in garnishing more than 25% of a debtor's income. Garnishment for these debts can reach 50% of a debtor's income.

Utah Statute of Limitations

A statute of limitations is the time available to sue or to enforce a judgment, such as through garnishment. Since a creditor first needs a judgment in its favor before seeking garnishment, it must be sure to sue the debtor within the appropriate time period (limitation periods vary by type of debt or cause of action). Some common consumer cause of action limitation periods in Utah include:

• Open accounts (credit cards) and oral contracts: 4 years
• Written contracts and promissory notes: 6 years

These periods are important because if too many years have passed to sue, the creditor will be unable to garnish the debtor's income.

After a creditor has sued and obtained a judgment, Utah gives it another 8 years to enforce the judgment. This means that if the debtor has little or no income at the time the creditor wins in court, the creditor can wait for several more years, to see if the debtor gets to an income level worth garnishing.

Writ of Garnishment in Utah

Garnishment comes after a creditor has already obtained a favorable judgment in court. It was at that time—during the earlier litigation—that the debtor had the opportunity to defend him- or herself and dispute the debt. Since the debtor has already had that opportunity, it generally cannot re-litigate the debt and challenge it on its merits during garnishment. This—the creditor's possession of a judgment from prior litigation—greatly reduces the debtor's role in garnishment. The creditor is not refighting the debt with the debtor; it merely needs to enforce it against a third party.

The creditor needs to apply to the court for an order garnishing the debtor's income. In doing so, the creditor states the following:

1) It has a judgment.

2) The judgment has not been paid.

3) Garnishment is necessary to satisfy (or pay) the judgment.

4) The garnishee is believed to have money of debtor's (e.g. the debtor's salary or wages) which can be used to satisfy the creditor's judgment.

The court serves papers on the garnishee, requiring it to verify that it has money belonging or owed to the debtor. If the garnishee does not—or has less than the creditor believes—it can challenge the factual assertions of the garnishment, but it cannot dispute the creditor's basic right to garnishment. Once a factual basis is established for garnishment (i.e. that the garnishee has money belonging to the debtor) garnishment will be ordered. More on Stopping Wage Garnishment in Utah.

Getting Legal Help

Even though the creditor is simply a previously litigated judgment, with a lawyer's help, there are ways the debtor can challenge, or at least reduce, the garnishment, such as:

Attack the judgment. Remember: the debtor cannot re-litigate a previously fully and fairly litigated debt. On the other hand, if the judgment was awarded improperly owing to procedural or process defects or irregularities (such as debtor never having received proper notice), it may be possible to overturn set the judgment aside or overturn it.

Attack the garnishment. (1) Is the garnishment being brought too late (statute of limitations)? Is the garnishment not being brought in the correct way (the correct paperwork not filled out or served; or the correct process not followed)? Is there some error in the garnishment (e.g. wrong debtor named, or wrong amount listed)?

Reduce what's owed. That portion of debtor's income coming from exempt sources does not contribute to the debtor's disposable income. Since the amount that can be garnished is a function of the available disposable income, the lower the disposable income, the less that can be garnished.

For more information:

Utah Code (the state statutes) [http://www.le.state.ut.us/~code/code.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]