Garnishments are the most popular method that creditors use to collect the debts owed to them. A creditor who has obtained a Judgment against a debtor may ask the Court to issue a Post-Judgment Garnishment Order.
This Garnishment Order is not sent directly to the debtor; it is sent to any person or business that may owe money to the debtor or who may hold money or property that belongs to the debtor. This person is the Garnishee.
The law requires the Garnishee to file a report with the Court and with the creditor that discloses any money or property belonging to the debtor that is within the Garnishee’s control. Common types of garnished property are: wages from employment, bank accounts, safe deposit accounts, debts owed to the debtor, and personal property in the Garnishee’s possession that belongs to the debtor.
Different Types of Garnishment
A Wage Garnishment is most commonly sent to the debtor’s employer and requires the employer to periodically turn over up to 25% of the debtor’s net wages to the creditor. (It is also referred to as Periodic Garnishment, because the Garnishee/Employer is required to turn over the debtor’s wages “periodically” for up to 91 days.) This garnishment may be reissued by the Court every 90 days until the debt is paid, or the debtor is no longer employed there.
A Periodic Garnishment may also be sent to a person who owes the debtor money that is payable in installments, such as a tenant in the debtor’s rental property, or someone who makes regular loan payments to the debtor.
The second form of Garnishment is the Bank Garnishment, also referred to as a Bank Levy or Non-Periodic Garnishment. It is called a Non-Periodic Garnishment because it is sent once, and is only good one time.
A creditor issues a Non-Periodic Garnishment to anyone who owes the debtor money, or who holds money or property of the debtor. The Garnishee is required to report all money, property and assets that it holds that belongs to the debtor at the time that they receive the garnishment.
In most cases, the garnishment is sent to a bank that may hold the debtor’s money in a money market, checking, savings, and certificate of deposit account or even who holds the debtor’s safe deposit box.
Objections to Garnishment
The Garnishee is required to mail to the debtor a copy of its report of the debtor’s income and assets. This report is called a Garnishee’s Disclosure Statement. When a debtor receives the Disclosure Statement, he or she has 14 days to file written objections to the garnishment with the Court.
A debtor may also file with the Court a written request to allow the debtor to pay the judgment by making regular installment payments to the creditor. If the debtor files objections or requests to make payments by installments, the Court will set a hearing on the matter and will make a decision.
If the Court grants the Debtor’s motion for installment payments, a Wage Garnishment may be cancelled. The Court may also cancel a Non-Periodic Garnishment or Bank Levy if the objections are granted.
Contact A Garnishment Attorney
Garnishments are often a major reason why consumers and businesses seek the advice of a bankruptcy or debt relief attorney. If you have a judgment against you or you have received a Garnishee Disclosure Notice, call Resnick Law for legal advice. We will help you make the right choices. Contact us at 248.642.5400, for a free telephone consultation or contact us online.