A garnishment is a means of collecting a judgment for money in which some third person (the garnishee) is ordered to pay money to the plaintiff which the garnishee owes to the defendant.
Wage garnishment, the most common type of garnishment, is the process of deducting money from an employee's monetary compensation (including salary) as a result of a court order. Such payments are limited by federal law in the United States to 25 per cent of the disposable income that the employee earns. Garnishments can be taken for any type of debt but common examples of debt that result in garnishments include:
Garnishments are taken as part of the payroll process. When processing payroll, sometimes there is not enough money in the employee's net pay to satisfy all of the garnishments. In such a case, the correct order to take a garnishment must be satisfied. For example, in a case with federal tax, local tax, and credit card garnishments, the first garnishment taken would the federal tax garnishments, then the local tax garnishments, and finally, and garnishments for the credit card.
At present four U.S. states — North Carolina, Pennsylvania, South Carolina and Texas — do not allow wage garnishment at all except for debts related to taxes, child support, federally-guaranteed student loans, and court-ordered fines or restitution for a crime the debtor committed. Several other states observe maximum thresholds that are lower than the 25 per cent maximum provided by federal law.
The other type of garnishment, also known as attachment, requires the garnishee to deliver all the defendant's money and/or property in the hands of the garnishee at the time of service of process to the court, to be paid over to the plaintiff. Since this type of garnishment is not continuing in nature, but is not subject to the type of restrictions that apply to wage garnishment, it is most often used against banks, or other persons or companies that incur liquidated obligations in the regular course of business.
Last updated: 07-31-2005 01:39:53
