It happened. A creditor sued you for an unpaid debt and won a money judgment. Now the creditor has the legal right to take action against you for payment. One of the most powerful tools available is a wage garnishment. Wage garnishment can start as soon as ten days after judgment—depending on how much the creditor already knows about you, and what tools the creditor uses to find out more—or at any point in the future for as long as the judgment remains valid.
How Does a Creditor Get a Judgment?
A judgment is a court order stating that you legally owe the creditor a particular amount of money. If the court awarded the creditor a judgment against you, it means that you didn’t respond to a collection lawsuit, or that you responded but the court ruled against you.
(To learn more about the process, start with Delinquent Debt Lawsuit: What to Expect When a Creditor Sues You.)
What Happens After Judgment?
The creditor will attempt to locate your assets and explore ways to force you to pay the judgment. The first step will be to review information it already has about your financial situation. For instance, when you filled out an application for credit, the creditor might have asked you to disclose the name of your employer. Or a creditor might have the right to find your employer by pulling your credit report.
Additionally, a post-judgment creditor can ask you to submit to a procedure called an “examination of assets.” (Your jurisdiction might use a similar term, such as “order of examination” or “debtor’s examination.”) The examination is a court hearing at which a judge asks you to testify under oath about your financial situation. You’re required to answer any question related to your finances, including where you work.
(If you’d like to learn about additional creditor collection tactics, read Collecting on Small Claims Judgments.)
How Does a Wage Garnishment Start?
The creditor initiates the garnishment process by sending a wage garnishment order to your employer. You’ll likely receive a copy of the garnishment order before it begins. Read the notice and order carefully. Most will contain information about the legal steps you can take to stop the garnishment or lower the amount taken from your paycheck.
Once you receive a wage garnishment order, you will have a short amount of time to take action before the garnishment begins. Your employer won’t fight the garnishment on your behalf. In fact, an employer that doesn’t comply with the order faces legal penalties.
(To learn about the different types of garnishments, see When Can a Creditor Garnish Your Wages?)
How Much Can Be Garnished?
Judgment creditors aren’t allowed to take your entire paycheck. The law sets the maximum amount that a creditor can take. Typically that amount is 25% but it can vary depending on the garnishment type and state law. Also, if another creditor is already garnishing your paycheck for the maximum amount, any later creditor will have to wait until the first creditor is paid in full before its garnishment can begin.
(Find out more in How Much Can a Creditor Garnish From My Paycheck?)
What If the Garnishment Starts Without Warning?
If you receive a garnishment for a debt that you don’t believe you owe, you’ll want to investigate. For instance, you’ll likely want to ask the payroll department to give you a copy of the order (if you didn’t receive it already). The garnishment order should have the court case number on it, which you can use to search for the case at your local courthouse. Most jurisdictions now have online databases that make this research easier.
If you don’t recognize the debt and the creditor didn’t serve you with a copy of the complaint, you can proceed by asking the court to set aside the judgment (unwind it) and allow you a chance to respond to the complaint. Setting aside a judgment can be complicated because it requires you to file a petition with the court. You’ll want to consider consulting with an attorney before taking this step.
Questions for Your Attorney
- How much can a creditor take from my wages in my state?
- Can you help me lower the garnishment amount?
- How do I fight a garnishment for a debt that I don’t owe?