Collection: The New Garnishment Law

Effective March 30, 1999, the Garnishment laws have been amended, changing the way the courts and employers handle garnishments on employees' wages. The major change is that garnishments are now continuous orders that require the employer to withhold funds from each pay period until the judgment has been paid off, or the garnishment expires. With these changes, a garnishment that is issued will expire in six (6) months, and then a new garnishment will have to be issued. The old law forced Creditors to file a new garnishment every month for each Debtor.

An issue this brings up is "what happens if the Debtor's wages are already being garnished by another creditor?" The answer is that the new garnishment starts after the other is paid off or expires. This is called "stacking." If the garnishment is "stacked" then the Creditor may have to re-file their garnishment after six (6) months.

A step-by-step analysis of how the garnishment procedure works is as follows:

  • First, a judgment for money owed to a Creditor is awarded by the Court.
  • Second, a 15-day notice (Statutory Demand) is sent to the Debtor after being verified by the Post Office.
  • Third, upon receipt of the 15-day notice, the Debtor has the option of doing one of the following:
    • Pay the total amount due;
    • Pay the amount that would normally be garnished;
    • Apply for a Trustee, or
    • File for Bankruptcy.
If the Debtor does nothing, then an Affidavit of Garnishment is filed with the Court, along with a proof of mailing, and various other forms, and the Court begins the garnishment proceedings. Once the garnishment order is issued, the Debtor's employer is required to send a portion of the Debtor's earnings to the Court. The Court will, in turn, issue the money collected to the creditor. If a Debtor has a child support order, the total amount that can be taken from his or her monthly pay is 25%, according to Federal Law.

This new law seems to be working well and actually gives an advantage to both the Creditor and the Debtor. The Creditor eliminates the hassle of preparing hundreds of garnishments every month, and the Debtor will save additional charges for court costs, which eventually become part of his or her debt each time a new garnishment is filed.

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