Garnishment

Definition

Garnishment is a legal process through which a creditor can collect a debt by obtaining a court order to seize a debtor's property or income directly from a third party, such as an employer or a bank. This process allows creditors to secure payment for debts owed to them after a judgment has been entered in their favor. Garnishment can apply to wages, bank accounts, or other forms of property, and it is typically initiated after the creditor has obtained a judgment confirming the debtor's liability.

5 Must Know Facts For Your Next Test

1. Garnishment can apply to various types of income, including wages, bonuses, and commissions, allowing creditors to collect a portion of the debtor's earnings directly from their employer.
2. The amount that can be garnished from wages is typically limited by federal and state laws to protect debtors from losing all of their income.
3. Before garnishment can occur, the creditor must usually first obtain a judgment against the debtor, which confirms the amount owed and authorizes the garnishment process.
4. Certain types of income, like Social Security benefits and retirement funds, are generally exempt from garnishment under federal law, providing some protection to debtors.
5. Garnishment is not automatic; creditors must follow specific legal procedures to initiate and enforce it, including notifying the debtor and allowing for any defenses they may have.

Review Questions

• How does the garnishment process begin after a creditor has obtained a judgment against a debtor?
  • Once a creditor obtains a judgment confirming that the debtor owes money, they can initiate garnishment by filing a request with the court. The creditor must provide information about the debtor's assets and income sources that are potentially subject to garnishment. After the court issues an order for garnishment, the creditor can serve this order to the third party holding the debtor's property or income, such as an employer or bank, effectively allowing for direct collection.
• Discuss the legal protections available to debtors against garnishment and how they may limit the amount that can be seized.
  • Debtors are afforded various legal protections against garnishment through federal and state laws. For example, federal law limits the amount that can be garnished from wages to 25% of disposable earnings or the amount by which weekly earnings exceed 30 times the federal minimum wage, whichever is less. Additionally, certain types of income are exempt from garnishment, such as Social Security benefits and disability payments. These protections are designed to ensure that debtors retain enough income to meet their basic living expenses.
• Evaluate how the garnishment process impacts both creditors and debtors in terms of financial stability and legal recourse.
  • The garnishment process can significantly affect both creditors and debtors. For creditors, it provides a means of collecting debts owed to them, potentially improving their financial position. However, it also requires adherence to legal procedures that can be time-consuming and costly. For debtors, garnishment can lead to financial instability as it reduces their take-home pay and may jeopardize their ability to meet essential living expenses. Debtors do have legal recourse to contest garnishments if they believe they were improperly pursued or if they qualify for exemptions based on their circumstances.

Related terms

judgment: A court's final decision regarding the rights and obligations of the parties involved in a lawsuit, often serving as the basis for initiating garnishment.

debtor: An individual or entity that owes money to another party, typically as a result of borrowing or a judgment entered against them.

creditor: A person or institution that is owed money by a debtor, often seeking repayment through legal means such as garnishment.