Wage garnishment and bank account garnishment are the two most common methods of collection for a judgment creditor. Ultimately, garnishments lead to a bankruptcy filing, as the loss of funds renders a consumer unable to handle their monthly debts, not to mention pay utilities and other necessary living expenses. Many consumers are unaware of how the garnishment process works, or the steps that lead up to a garnishment. Hopefully this article will explain the process in sufficient detail so that a consumer does not ignore the warning signs leading up to a garnishment.

While some creditors can garnish wages without the filing of a lawsuit and rendering of a judgment (IRS), traditional creditors must obtain a judgment in order to obtain a garnishment.

While some creditors can garnish[i] wages without the filing of a lawsuit and rendering of a judgment (such as the Internal Revenue Service), traditional creditors must obtain a judgment in order to obtain a garnishment. A lawsuit must be filed against the consumer in the county in which they live, and must be served upon them by either a Marshal, Sheriff, or process server. The lawsuit (or complaint) is usually delivered in person to the consumer, either at their home or place of employment. In the alternative, it may be delivered to an adult relative at the residence if the consumer is not available. The lawsuit will designate the consumer as a “defendant”, and will recite the reasons why the creditor (designated as “plaintiff”) is entitled to a monetary judgment. The defendant has 30 days to respond (“answer”) the allegations in the complaint, by filing an answer with the court in which the lawsuit was initiated.

A common mistake for consumers is to think that they have answered the lawsuit by calling or contacting the plaintiff’s attorney. The plaintiff creditor’s attorney has no obligation to inform you of your legal rights, and your right to file an answer setting forth your defenses.[ii] If no response is filed with the court within 30 days, the defendant has the right to apply for a default judgment. In simple terms, a default judgment means that the plaintiff creditor is entitled to a monetary judgment against the defendant because the defendant essentially acknowledged the truth of the allegations by their silence. The judgment will be signed by the judge of the court in which it was filed, and a copy delivered to both the plaintiff creditor and the consumer defendant. Once the judgment is received by the creditor, they will then begin the judgment collection process.

 Garnishment GeorigaA judgment constitutes a “lien” on any real estate owned by the consumer defendant in the county in which the judgment was obtained. However, garnishment is the best avenue for a creditor to collect on their judgment, usually because the consumer does not own any real estate, or it has little or no equity available to satisfy the judgment. In order to garnish a defendant’s wages, the judgment creditor must apply for a “summons of continuing garnishment”, which can be directed to anyone who owes or holds money for the defendant. The summons that is submitted to an employer requires the employer to garnish (deduct) up to 25% of the employee’s after-tax income, and submit it to the Clerk of Court in which the garnishment order was obtained. Many times the garnishment order will be obtained in a different court than the one in which the judgment was obtained, depending upon where the employer is located or does business. [iii] If the employer does not respond to the summons within 45 days, either by deducting the money or explaining why it cannot do so (for instance if the defendant is no longer employed), then the employer becomes responsible for the balance of the judgment along with the defendant. Because of this possibility, many employers start the garnishment process right away. While the law requires that a copy of the garnishment summons be delivered to the defendant, some collection law firms only provide the summons to the defendant after the employer has already been notified, and the garnishment has already begun.

A wage garnishment only lasts 6 months. However, it can be renewed indefinitely, in the event that the prior garnishment was not sufficient to satisfy the judgment. Many times a defendant will believe that the judgment has been satisfied, due to the fact that the garnishment has ceased, only for it to be renewed again after several pay periods. Fortunately, employers are not permitted to fire an employee if they are subject to one wage garnishment. However, they are allowed to fire an employee who has two or more pending wage garnishments, subject to certain exceptions (such as taxes or child support).

If you ignore it, you will be putting your finances, and your family, at risk.

If a creditor has gone to the effort to file a lawsuit, then they are going to take any steps possible to collect on the judgment. If you have been served with a lawsuit, and have no defense to the debt, then contacting a bankruptcy attorney would be a good idea. While a bankruptcy filing will stop the collection activity at any point – pre-judgment, post-judgment, pre-garnishment or post-garnishment – it is better to take steps to prevent a garnishment altogether. Many times the garnishment will spawn a host of other problems, including missed mortgage or car payments, and bounced checks. So remember that if you are sued on a debt, it is important to seek legal counsel right away. If you ignore it, you will be putting your finances, and your family, at risk.

[i] Alternate words used are “levy” and “attach”, but for purposes of simplicity, “garnish” and “garnishment” will be used throughout this article.

[ii] As this article concerns wage garnishment, description of the civil procedure, trial and appeals process will not be addressed.

[iii] Many of the larger corporations, especially those who do business in more than one state, usually have a registered agent for service of process in the Atlanta area. Additionally, most of the larger debt collection firms are located in the Atlanta area, and practice throughout the state. A common tactic for these firms is to submit the garnishment order to the employer’s registered agent, out of Fulton, Gwinnett or Dekalb counties.