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Wage Garnishment

Under wage garnishment law (WGL), a judgment creditor can make an individual judgment debtor's employer withhold the nonexempt portion of the debtor's disposable earnings for payment directly to the levying officer. Wage garnishment might be the only way to enforce a judgment where other property of the debtor is exempt.

If the judgment creditor knows the name and address of the judgment debtor's employer, then it is relatively easy and inexpensive to garnish a debtor's wages. To garnish the wages of a nondebtor spouse, however, a court order is required.

So long as the judgment creditor knows the name and address of the judgment debtor's employer, it is relatively easy and inexpensive to garnish a debtor's wages. (However, a court order is required to garnish the wages of a nondebtor spouse.)

Although the garnishment process is relatively simple, the downside for the creditor is that at least 75% of a debtor's earnings are automatically exempt from garnishment. So unless the debtor earns a large salary, the creditor will get a relatively small amount from a wage garnishment. Satisfying a judgment by garnishing the debtor's wages could take years, and if the debtor quits or is fired, there won't be any wages to garnish.

Also, a wage garnishment might prompt the debtor to file a bankruptcy petition, and if the debtor receives a discharge in bankruptcy, the wage garnishment will not apply to the debtor's postpetition wages.

Self-employed: Wage Garnishment Law does not apply to self-employed debtors.

Incorporate professionals: People who form "professional corporations", such as doctors, dentists, lawyers, are not self-employed – they are employed by their corporations. Therefore, an incorporated professional's wages can be garnished.

State employees: The earnings of a state or local employee or public officer can be withheld under wage garnishment law.

Federal employees: According to federal law, salaries of federal employees can be garnished for any purpose through legal process issued by a competent authority in the US.

Securing Withholding orders to Garnish Wages

To secure a wage garnishment, the creditor has to serve the judgment debtor's employer with a proper earnings withholding order. There are three types of these:

  • Withholding order for support: This is issued to collect delinquent amounts under a child or spousal support judgment.
  • Withholding order for taxes: This is issued to collect a state tax liability.
  • Earnings withholding orders: Withholding orders that are neither for support nor taxes are simply called "earnings withholding orders."

In the event of an effective earnings withholding order is served on an employer by the levying officer or registered process server, the employer must:

  • withhold the nonexempt portion of the employee's disposable earnings for all pay periods ending during the withholding period;
  • pay to the levying officer, by the 15th of each month (or sooner), all funds withheld during the preceding month.

An earnings withholding order is effective ten calendar days after it has been served and it remains valid until the earliest of the following dates:

  • The date the employer withholds the full amount required to satisfy the order;
  • The date of termination in a court order served on the employer;
  • The date of termination in a termination notice served on the employer by the levying officer;
  • The date the withholding order falls dormant or is suspended and thus automatically terminates.

If not terminated earlier, a withholding order for support automatically ends one year after the employee stops working for the employer.

The lien ordinarily continues for one year from the date the judgment debtor's earnings became payable, unless the amount required to be withheld is paid earlier in the manner required by law.

An earnings withholding order may not issue against earnings of the judgment debtor's spouse unless an appropriate court order is obtained.

The earnings withholding order must be served on the employer within 180 days following the writ of execution being issued – otherwise, the order is invalid. The withholding order can be served by the levying officer or a registered process server.

The employer must be served with:

  • the original Earnings Withholding Order, with one copy;
  • a notice informing the employee of the order's effect and the employee's right to a hearing and certain remedies;
  • forms necessary to obtain an administrative review or judicial hearing with instructions on how to file the forms.

What earnings are exempt from garnishment?

Incorporated into the WGL are federal restrictions on the maximum amount that can be withheld from an employee's earning.

The maximum part of the debtor employee's aggregate "disposable earnings" (see below) that may be withheld for any work week may not exceed the lesser of:

  • 25% of the employee's disposable earnings for that week;
  • The amount by which the disposable earnings for the week exceeds 30 times the federal minimum hourly wage.

This means that at least 75% of an employee's disposable earnings are effectively exempt from all nonsupport earnings withholding orders. Moreover, this exemption is automatic – no claim of exemption needs to be made.

"Disposable earnings" are those earnings remaining after deduction of any amounts required by law to be withheld – including deductions for social security, federal and state income taxes, state disability insurance and payments to public employee retirement systems.

The automatic exemption does not apply to:

  • earnings withholding orders for support (see below);
  • any court order involving a Chapter 13 bankruptcy proceeding;
  • any debt for federal tax.

Earning withholding for support

Only one half of a judgment debtor's disposable earnings are exempt from garnishment under an earnings withholding order for support (as opposed to 75% for nonsupport withholding orders, above).

Upon motion of any interested party, the court can make an "equitable division" of the judgment debtor's earnings. In doing so, the court has to take into account the needs of all the people the judgment debtor is required to support – for example, both the debtor's former spouse and present family.

The court can order more or less than 50% of the judgment debtor's earnings to be withheld, as long as the maximum amount withheld does not exceed the maximum permitted under federal law.

As well as the automatic exemption for nonsupport withholding orders, that portion of an employee's earnings necessary for the support of the judgment debtor or his or her family (including a spouse or former spouse) is exempt from nonsupport earnings withholding orders.

The judgment debtor must file a timely claim with the levying officer to obtain this exemption. If the judgment creditor makes no opposition to the claim, the exemption is automatically granted and the earnings must be released. A claim of exemption can be made by the judgment debtor any time during the withholding period. An earnings withholding order is effective ten calendar days after service.

A judgment creditor wishing to oppose the claim of exemption must file a Notice of Opposition with the levying officer within ten days of the Notice of Claim of Exemption being mailed.

Within the same time period the judgment creditor must file with the court a Notice of Motion for an Order Determining the Claim of Exemption. The judgment creditor must also complete and file with the court the official form Notice of Hearing on Claim of Exemption.

The judgment creditor must give written notice of the hearing to the levying officer at least 16 court days before the hearing. In the same time frame, the judgment creditor must also serve a copy of both the notice of opposition and the notice of hearing on the judgment debtor (and his or her attorney if requested in the claim of exemption) at the address stated in the claim of exemption. Proof of service must be filed with the court.

The court hearing on the claim of exemption must be held no more than 30 days after the notice of motion is filed (unless continued by the court for good cause). The levying officer must file the originals of the claim of exemption and notice of opposition with the court. If the court grants the exemption claim, it may direct that the earnings withholding order be modified or terminated. The effective date of termination can precede the date of the hearing. The court may also order that any exempt earnings previously withheld are repaid to the judgment debtor.

The court doesn't need to make any findings. The court clerk must transmit a certified copy of the order modifying or terminating the earnings withholding order to the levying officer. The levying officer must then promptly serve the judgment debtor's employer either a copy of the modified earnings withholding order or a notice that the withholding order has been terminated.

Priority between withholding orders

If an earnings withholding order is served while a prior withholding order is still in effect for the same employee, the subsequent order is ineffective. If two or more earnings withholding orders are served for the same employee on the same day, the employer must comply with the order issued for the judgment that was first entered (the date of entry is indicated on the order). If the judgments were entered on the same day (a rare event), the employer must comply with one of the orders but has complete discretion to choose which order.