Proceeding Against the Debtor's Wages – Wage Garnishment
A. Impact of a Wage Garnishment
B. Limits on Wage Garnishment
If the debtor is working, you may be able to intercept a portion of his wages in order to satisfy your judgment. This process is known as a wage garnishment. You can garnish wages relatively quickly and cheaply If:
- The judgment debtor works as an employee (not an independent contractor)
- The judgment debtor's job produces pay above the poverty line
- Other wage garnishments aren't already in effect (unless your wage garnishment is for child or spousal support)
- The debtor does not leave the job, contest the wage garnishment or file for bankruptcy.
A wage garnishment requires little effort from you. You give the levying officer information about where the judgment debtor works, provide a Writ, of Execution and copies and pay a modest fee. Then you simply wait; the levying officer collects money from the employer and gives it to you. You can always lift the wage garnishment if you and the judgment debtor come to an agreement about voluntary payment of the judgment.
A wage levy can usually provide you with approximately 25% of the judgment debtor's disposable income. Naturally, if part or all of the debtor's income is determined to be exempt, you'll actually receive less.
Special laws govern child or spousal support wage garnishments. These garnishments can reach up to 50% of the judgment debtor's disposable income and have first priority. Thus, if a non support levy is already in effect, you can supplant that levy if your judgment is for support and receive up to 60% of the debtor's wages.
Garnishing spouses' wages: If you have a judgment against someone who is married, you need a court order to garnish the spouse's wage (CCP § 706.109). Naturally, this restriction does not apply if both spouses are named as judgment debtors in the court judgment.
A. Impact of a Wage Garnishment
Your power to garnish a judgment debtor's wages is often a strong impetus for the debtor to pay off your judgment, since he / she may want to avoid the embarrassment and inconvenience of having his / her salary interfered with. Also, despite a federal law that prohibits employers from firing employees for wage garnishments that result from a single judgment, most employees rightly believe that a garnishment won win them brownie points with their bosses.
And they can be fired for multiple wage garnishments from different judgments. Thus, even the most uncooperative judgment debtor may be willing to pay voluntarily if faced with the prospect of a wage garnishment.
But a wage garnishment could push a debtor to leave his / her job, or propel a debtor toward bankruptcy. The loss of part of a paycheck, coupled with the embarrassment of having an employer know about her / her financial problems, may cause a debtor to look for a quick solution to relieve the Pressure. If you choose to garnish wages, remember that you often walk a fine line between making great progress on collecting your judgment and closing off the possibility of collecting.
The debtor probably won't go bankrupt or quit his / her job if the debtor has a lot at stake. This would probably hold true for a debtor who is a well established member of the community without a long list of other debts, an employee of an established corporate business in which he / she has a significant ownership ownership or an owner of real property in which he / she has significant equity.
B. Limits on Wage Garnishments
Federal debtor protection laws limit how much of anyone's wages you can take at any one time. Unless your judgment is for child or spousal support, you may garnish up to 25% of the portion of the debtor's take home wages, beyond a minimum.
If your judgment is for child or spousal support, you are entitled to garnish at least 50% of the judgment debtor's disposal wages above the federal minimum. If the debtor is not currently supporting a child or spouse, it may be possible to get as much as 65% of a judgment debtor's wages taken for support (CCP § 706.052 (c)).
Here are some possible hurdles in the wage garnishment process:
Prior garnishment by other creditors: You can't garnish wages if they are already being garnished by and other creditor, unless you are a former spouse seeking alimony or child support payments. Normally, if your garnishment is second in line, it will be rejected by the employer, and you will have to file again when the previous creditor's garnishment ends. Bear in mind that an employee can be fired for two separate wage garnishments.
California exemption law: The debtor has the legal right to show that the portion of his wages that are above the federal minimum should be exempted because it is necessary to his / her own support or the support of a spouse or children. However, the debtor cannot qualify for this sort of exemption if the judgment itself comes from a debt that was incurred for the necessaries of life.
Federal workers: Until February of 1994, you couldn't garnish the wages of federal employees (except Postal Service and Federal Housing Administration employees) or people in the military. You may now garnish the wages of federal workers (USC §5520a)
Under interim federal regulations governing the federal garnishment process, you may have the federal agency employer served with your Earnings Withholding Order personally or by certified or registered mail return receipt requested. The service must be made on the official named by the agency to accept service; call the agency and ask. The agency itself need not be named in the order. You must adequately identify the federal worker whose wages are being garnished, otherwise the earnings Withholding Order will be returned to the issuing court.
The regulations suggest that the following debtor information be provided:
- Full name
- Date of birth
- Employment or Social Security number
- Component of the agency for which the debtor works
- Location of official duty station or work site
- Home address.
The agency is supposed to respond to the garnishment with in 30 days. The garnishment becomes effective as of the date it is served, but is subject to all other garnishments served before the date. Child and spousal support garnishment always get first priority.
The amount that can be garnished is based on the federal worker's salary after the following deductions are subtracted:
- Mandatory deductions
- Deductions for amounts owed the federal government
- Withheld taxes
- Health insurance premiums
- Normal retirement contributions
- Normal life insurance premiums
If the amount that is left after all these deductions is $ 127.50 a week or less, then no garnishment will be made.
Military services note: Although the interim regulation described above for federal employees covers civilian employees of military employers, it does not cover actual member of the armed services. To garnish the wages of an armed services member, you will need to ask the particular service about its specific procedures.
Seamen's / longshoremen's exemption : You can't garnish seamen's, longshoremen's or harbor workers wages.
Benefits and pensions exemption: Unless your judgment is for child or spousal support, you can't garnish unemployment benefits, worker's compensation claims or awards, relocation benefits, disability or health insurance benefits or most retirement plans.
What does all this mean to you, the judgment creditor? Simply that the debtor may be able to contest your garnishment. Depending on the status of the debtor, the type of income and the amount of his / her pay, this may or may not be a problem for you, However, the fact that hurdles do exist means that many judgment creditors find it in their interest to contact debtors one least time to try to work out a settlement before initiating a wage garnishment.
The information and documents used in this article are examples only. All substantive information must be conformed to your particular case. THERE IS NO INTENT TO PROVIDE LEGAL ADVICE IN THIS ARTICLE. TREATING THE INFORMATION AS LEGAL ADVICE COULD HAVE NEGATIVE CONSEQUENCES.
Source by Chris Parava