Proceeding Against the Debtor’s Salary – Garnishment of Salary

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 their wages to serve your judgment. This process is known as 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 work produces a payment above the poverty line
• Other wage garnishments are not yet in effect (unless your wage garnishment is for child or spousal support)
• The debtor does not quit work, contest the wage garnishment, or file bankruptcy.

A wage garnishment requires little effort on your part. You give the lien officer information about where the judgment debtor works, provide a Writ of Execution and copies, and pay a modest fee. So just wait; the collection officer collects the money from the employer and gives it to you. You can always lift the wage garnishment if you and the judgment debtor reach an agreement about voluntary payment of the judgment.

A wage lien can generally provide you with approximately 25% of the judgment debtor’s disposable income. Of course, if some or all of the debtor’s income is found to be exempt, you will actually receive less.

There are special laws that govern wage garnishments for child or spousal support. These garnishments can reach up to 50% of the judgment debtor’s disposable income and have first priority. Therefore, if a non-support lien is already in effect, you can supplant that lien if your order is for support and receive up to 60% of the debtor’s wages.

Spouses wage garnishment: If you have a judgment against someone who is married, you need a court order to garnish the spouse’s wages (CCP § 706.109). Naturally, this restriction does not apply if both spouses are named as judgment debtors in the judgment.

A. Impact of a wage garnishment

Your power to garnish the judgment debtor’s wages is often a strong impetus for the judgment debtor to pay his judgment, as he may want to avoid the embarrassment and inconvenience of having his wages interfered with. Also, despite a federal law that prohibits employers from firing employees for wage garnishment resulting from a single judgment, most employees rightly believe that a garnishment won’t score them points with their bosses.

And they can be fired for multiple wage garnishments from different lawsuits. Therefore, even the most uncooperative judgment debtor may be willing to pay voluntarily if faced with the prospect of wage garnishment.

But a wage garnishment could force a debtor out of a job or bankrupt a debtor. The loss of part of a paycheck, coupled with the embarrassment of an employer knowing about their financial problems, can cause a debtor to seek a quick fix to relieve the pressure. If you choose to garnish wages, remember that you are often walking a fine line between making great progress in collecting your judgment and closing off the possibility of collecting.

The debtor probably won’t go bankrupt or quit their 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 with no long list of other debts, an employee of an established corporate company in which he/she has significant ownership, or an owner of real estate in which he/she has significant capital.

B. Limits on wage garnishments

Federal debtor protection laws limit the amount of anyone’s wages you can take at any one time. Unless your order is for child or spousal support, you can garnish up to 25% of the debtor’s share of the take-home pay, above the minimum.

If your judgment is for child or spousal support, you have the right to garnish at least 50% of the judgment debtor’s disposition wages above the federal minimum. If the debtor is not currently supporting a child or spouse, it is possible to obtain up to 65% of the judgment debtor’s wages for support (CCP § 706.052(c)).

Here are some possible obstacles in the wage garnishment process:

Prior seizure by other creditors: You cannot garnish wages if they are already being garnished by another creditor, unless you are an ex-spouse seeking alimony or child support payments. Typically, if your garnishment is second in line, it will be rejected by the employer and you will have to resubmit it when the garnishment from the previous creditor ends. Keep 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 their wages that is above the federal minimum should be exempt because it is necessary for their own support or the support of a spouse or children. However, the debtor may not qualify for this type of exemption if the judgment itself stems from a debt that was incurred for the necessities of life.

Federal Workers: Until February 1994, you couldn’t garnish the wages of federal employees (except Postal Service and Federal Housing Administration employees) or people in the armed forces. You can now garnish the wages of federal workers (USC §5520a)

Under the interim federal regulations governing the federal garnishment process, you may have the federal agency employer personally serve your income withholding order in person or by certified or registered mail, return receipt requested. The service must be made to the official designated by the agency to accept the service; Call the agency and ask. The agency itself does not need to be named in the order. You must properly identify the federal worker whose wages are being garnished, or the income withholding order will be returned to the issuing court.

The regulations suggest that the following information about the debtor be provided:

• Full name
• Birthdate
• Employment or Social Security number
• Component of the agency the debtor works for
• Location of official duty station or place of work
• Home address.

The agency is supposed to respond to the embargo in 30 days. The embargo is effective as of the date it is served, but is subject to all other embargoes served prior to the date. Child and spousal support garnishments always have first priority.

The amount that can be garnished is based on the federal worker’s wages after subtracting the following deductions:

• mandatory deductions
• Deductions for amounts owed to the federal government
• tax withheld
• health insurance premiums
• Normal retirement contributions
• normal life insurance premiums

If the amount remaining after all these deductions is $127.50 per week or less, then no garnishment will be made.

Military Service Note: Although the interim regulation described above for federal employees covers civilian employees of military employers, it does not cover actual members of the armed forces. To garnish the wages of a member of the military, you will need to ask the particular service about its specific procedures.

Exemption for seamen/steckers: The salary of sailors, stevedores or port workers cannot be attached.

Waiver of Benefits and Pensions: Unless your order is for child or spousal support, you cannot garnish unemployment benefits, workers’ compensation claims or awards, relocation benefits, health or disability insurance benefits, or most plans retirement.

What does all this mean to you, the judgment creditor? Simply that the debtor can challenge his lien. Depending on the debtor’s status, type of income, and the amount of your payment, this may or may not be a problem for you. However, the fact that there are obstacles means that many judgment creditors consider it in their interest. Contact debtors at least once to try to reach an agreement before initiating a wage garnishment.

The information and documents used in this article are only examples. All substantive information must be adjusted to your particular case. THERE IS NO INTENT TO PROVIDE LEGAL ADVICE IN THIS ARTICLE. TREATING THE INFORMATION AS LEGAL ADVICE MAY HAVE NEGATIVE CONSEQUENCES.

AGENCY COLLECTION, JUDGMENT COLLECTION