If you do not pay a debt, then a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Do not ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
This is one way the creditor can collect what you owe by taking money directly from your employer or your bank account or from another financial institution. The creditor gets this done by asking a judge to issue a “writ of garnishment.” Before this can happen, however, the creditor must file a lawsuit.
If the collector wins the lawsuit, they may “garnish” (take) some of your wages, bank account or other property to pay the debt. Some of your money is protected by law from being garnished, including:
However, you may have to take action to protect this money. You may want to get assistance from an attorney.
The best way to protect exempt benefits is to keep them separate from other money you may have. For example, you can receive your Social Security on a “Direct Express” debit card, so that it cannot be garnished from a bank account. If you would rather keep exempt benefits in the bank, you should keep them in a separate account. Don’t deposit any other money – such as gifts or paychecks – in that account. If a collector tries to garnish that account, you can send a letter to the bank explaining that all the income in the account is exempt.
Wage garnishments will continue until the debt is fully paid or until the job ends. Garnishments on bank or other financial accounts last from the time the bank or other financial institution receives the writ of garnishment to the time they file an accurate response to the writ. Garnishment on the bank or other financial account must be renewed every time the creditor wants to garnish additional money.
A Judgment only lasts for 10 years unless, according to the Arkansas Supreme Court, the creditor files a post-judgment writ, which then re-news the 10-year period. Traditionally, if a creditor wishes to re-new the original judgment, he must petition the court for a revival of the judgment. The creditor must send a “writ of scire facias” by, at the very minimum, first-class mail to your last known address, advising you that the creditor is petitioning the court to revive the judgment. However, if the creditor cannot find you, they may be able to serve you by publishing the “writ of scire facias” in a local newspaper. You have thirty days to object to the revival of the judgment. If you do not object within this time frame, the judgment will be renewed for another 10 years.
Under the Consumer Credit Protection Act, the maximum amount allowed to be garnished from disposable earning income may NOT exceed 25%. Therefore, in order for wages to be garnished, you must make 30% of minimum wage for a 40-hour week. Following is a chart which indicates the disposable income which may be garnished. Disposable income = gross wages – federal and state income and payroll taxes.
Weekly |
Biweekly |
Semimonthly |
Monthly |
|
If you earn $217.50 weekly or less, no wages may be garnished. |
If you earn $435.00 biweekly or less, no wages may be garnished. |
If you earn $471.25 semimonthly or less, no wages may be garnished. |
If you earn $942.50 or less, no wages may be garnished. |
|
If you earn more than $217.50 but less than $290.00, any amount above $217.50 may be garnished. |
If you earn more than $435.00 but less than $580.00, any amount above $435.50 may be garnished. |
If you earn more than $471.25 but less than $628.33, any amount above $471.25 may be garnished. |
If you earn more than $942.5 but less than $1256.66, any amount above $942.50 may be garnished. |
|
If you earn more than $290.00, the maximum amount that can be garnished is 25% of your disposable income. |
If you earn more than $580.00, the maximum amount that can be garnished is 25% of your disposable income. |
If you earn more than $628.33, the maximum amount that can be garnished is 25% of your disposable income. |
If you earn more than $1256.66, the maximum amount that can be garnished is 25% of your disposable income. |
If you are ordered to provide child or spousal support, the maximum amount of your disposable earnings that can be garnished is 50% or 55%. Which percentage is subject to garnishment depends on how far behind you are in paying court-ordered support. If you do not have a second family, the maximum amount of your disposable earnings that can be garnished increases to 60% or 65%.
How much a creditor can take from your bank account depends. For example, a garnishment may take all the money in a savings or checking account with your name on it, even if this causes checks to bounce. But federal and Arkansas state laws allow you to exempt certain items from garnishments and executions. Exemptions are complicated. You should consult an attorney to see if you qualify.
Federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.
Claiming Exemptions:
It depends. Multiple rules apply to responding to writs of garnishments and wage garnishments. The process also varies depending on whether you are claiming state or federal exemptions. Exemptions are complicated and require a notarized affidavit listing all of your property in detail. You should consult an attorney to see if you qualify.
