A wage garnishment is one of the most utilized weapons in a creditor’s collection arsenal. It allows a creditor to take money directly from a person’s paycheck until the debt is paid. Learn how you can stop a wage garnishment by contacting Steiner Law Group.
A creditor must first obtain a judgment before it can garnish wages
In order for creditor to obtain a wage garnishment, it must first file a lawsuit and obtain a judgment. In routine collections case, it is often easy for a creditor to obtain a judgment because in Maryland, the creditor can request an “affidavit judgment” under Md. Rule 3-306. This allows a creditor to file particular documentation with the court, and if the party being sued does not respond, the court can enter a judgment very quickly. Even if the party being sued does respond, there is often not much of a defense to a collection lawsuit and eventually the creditor will obtain a judgment. After 10 days have passed pursuant to Md. Rule 3-632, the judgment creditor can enforce its judgment through a wage garnishment. The judgment lasts for 12 years and can be renewed for longer and accrues interest at 10% per annum.
After obtaining a judgment, a judgment creditor must file a Request for Writ of Garnishment and Serve the Writ of Garnishment
Once the creditor has obtained a judgment and 10 days have passed, it is now a judgment creditor and can begin the wage garnishment process. Under Md. Rule 3-646, the judgment creditor must file a Request for Writ of Garnishment in the case, which is served upon the judgment debtor. Upon filing, the clerk of the court issues a writ of garnishment directed at the judgment debtor’s employer to be served by the judgment creditor. The issued writ of garnishment must be served upon the employer and the employer must file an Answer within 30 days of receipt of the writ of garnishment. If the judgment debtor works for the employer, the employer must state that the judgment debtor is employed and list his/her rate of pay and the existence of any prior liens.
The Garnishment Takes Effect
Once the employer has filed an answer and confirmed that the judgment debtor is employed, the garnishment begins by withholding a certain amount from the judgment debtor’s paycheck and sending that amount to the creditor. The amount of the garnishment is typically 25% of judgment debtor’s pay.
If the judgment debtor has more than one garnishment, under Md. Code C.L. § 15-603, the wage garnishments are satisfied in the order that they were served and each garnishment must be satisfied before the subsequent garnishments can take effect.
Exemptions to Wage Garnishment
MD Code, C.L. § 15-601.1 outlines the exemptions to garnishment, but in practicality, the only exemption to garnishment is that the judgment creditor can only garnish 25% of disposable wages and no more. Disposable wages is defined as all wages after deductions required to be withheld by law, such as court-ordered child support payments. Also exempt are medical insurance deducted from wages.
Protection Against Termination Because of Wage Garnishment
Both Federal and Maryland law provide limited protections for individuals against termination by their employer for a wage garnishment. Federal law provides that “No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.” 15 U.S.C. § 1674. This only applies to one indebtedness. If the employee has been subject to more than one garnishment for 2 or more debts, this protection does not apply. Maryland law has a similar protection against termination and it provides that “An employer may not discharge his employee because the employee’s wages are subjected to attachment for any one indebtedness within a calendar year.” An employer who willfully violates this provision is guilty of a misdemeanor and subject to a fine of not more than $1,000.00 and/or imprisonment for not more than one year.
Bankruptcy Stops Wage Garnishments
A bankruptcy filing stops all collection activity, including wages garnishments, due to the protection of the automatic stay that comes into effect upon filing. This can be a lifeline for many people. Additionally, under certain conditions within a bankruptcy, it may be possible to recover part or all of the wages that have been garnished. For example, Steiner Law Group recently recovered for a client more than $3,600 that was taken by a judgment creditor.
Wage garnishments are often used by judgment creditors because they are almost guaranteed to receive 25% from every paycheck. Steiner Law Group has experience with stopping wage garnishments and getting back certain garnishments that were taken. If you have questions about bankruptcy, please call (410) 670-7060.