Collect Your Court Judgment With a Wage Garnishment

If the debtor has a job, you may be able to grab up to 25% of his or her wages.

If you have won a court judgment against someone with a decent job, you may be able to intercept up to 25% of his or her wages to satisfy your judgment. This process, permitted in nearly every state, is called a wage garnishment.

When You Can Garnish Wages

You can garnish wages relatively quickly and cheaply if:

• the debtor receives a regular wage (he or she isn't self-employed)
• the debtor's pay is above the poverty line
• other wage garnishments aren't already in effect (unless your wage garnishment is for child or spousal support), and
• the debtor does not quit the job, contest the garnishment, or file for bankruptcy.

Whether You Should Garnish Wages

The threat of a wage garnishment is often a strong impetus for a debtor to make arrangements to pay off a judgment because many people want to avoid the embarrassment and inconvenience of having their salary reduced.

Also, even though a federal law bars an employer from firing an employee whose wages are garnished due to a single judgment, most employees believe that a garnishment won't win them brownie points with their bosses. And the law does not bar an employer from firing an employee for multiple wage garnishments from different judgments.

However, a wage garnishment could produce the opposite effect of what you want pushing a debtor to quit the job or, worse, file for bankruptcy. If you choose to garnish wages, remember that you walk a fine line between making great progress on collecting your judgment and closing off the possibility of collecting.

How to Garnish Wages

A wage garnishment requires little effort on your part. You give the sheriff or other local official (called the "levying officer") information about where the judgment debtor works. The levying officer collects money from the employer and gives it to you. You can end the wage garnishment if you and the judgment debtor make an agreement about payment of the judgment.

Limits on Wage Garnishments

Under federal law, you cannot garnish more than 25% of the debtor's disposable income. There is an additional protection for low-income people: A wage earner must be left with a weekly wage equal to 30 times the current federal minimum wage which is $6.55 until July 2009 and $7.25 thereafter. This means that the debtor gets to keep the first $154.50 per week; you can garnish 25% of the excess. (15 U.S.C. §1673(a)(1).)

If your judgment is for child or spousal support, you can garnish up to 50% of the debtor's take-home pay (55% if the debtor is 12 or more weeks in arrears). If the judgment debtor does not currently support a spouse or child, you can garnish up to 60% of the wages (65% if the debtor is 12 or more weeks in arrears). There is no automatic protection for low-income workers from child-support judgments.

A few states have even lower wage garnishment limits. If a state wage garnishment law results in a smaller garnishment, the state law must be followed. Ask your sheriff or marshal's office for your state's garnishment rules.

You face some additional limitations or at least potential obstacles in a few situations.

Debtor is already subject to another garnishment. You cannot garnish wages if they are already being garnished by another creditor, unless (1) the first garnishment takes less than 25% of the debtor's disposable income, or (2) you have a judgment for alimony or child support.

Debtor needs the money for basic support. The debtor has the right to object to your garnishment on the ground that she needs the money for her own support or the support of a spouse or children. The debtor must make this objection by filing a form with the court.

Debtor is a federal employee or in the military. You can garnish the wages of most federal employees, including someone on active military duty, but the process may prove cumbersome. You must serve the federal agency for which the employee works with a form called Application for Federal Employee Commercial Garnishment. You can obtain a copy at the website of the federal Office of Personnel Management at www.opm.gov/forms.

You must mail the form to the agency's office. A government publication called the Code of Federal Regulations (CFR) contains an appendix listing the address and phone number for every federal agency, indicating the appropriate official to receive your papers. The CFR is available online at www.gpoaccess.gov/cfr/retrieve.html. You'll be asked to enter the Title (enter "5"), the Part (enter "581" or "582"), and the Section (enter "501").

Debtor receives public benefits or payments from pension plan. Social Security benefits can never be garnished. And unless your judgment is for child or spousal support, you can't garnish unemployment insurance, workers' compensation awards, relocation benefits, or disability or health insurance benefits.

Garnishing payments made from a retirement plan is also very difficult. Most retirement plans contain "anti-alienation" provisions barring the plan administrator from paying benefits to anyone except the plan holder or beneficiary, such as a spouse.

To learn more about collecting court judgments, see Everybody's Guide to Small Claims Court, by Ralph Warner (Nolo).