Garnishment

• Author: Jeffrey Lehman, Shirelle Phelps

Page 39

A legal procedure by which a creditor can collect what a debtor owes by reaching the debtor's property when it is in the hands of someone other than the debtor.

Garnishment is a drastic measure for collecting a debt. A court order of garnishment allows a creditor to take the property of a debtor when the debtor does not possess the property. A garnishment action is taken against the debtor as defendant and the property holder as garnishee. Garnishment is regulated by statutes, and is usually reserved for the creditor who has obtained a judgment, or court order, against the debtor.

A debtor's property may be garnished before it ever reaches the debtor. For example, if a debtor's work earnings are garnished, a portion of the wages owed by the employer go directly to the JUDGMENT CREDITOR and is never seen by the debtor.

Some property is exempt from garnishment. Exemptions are created by statutes to avoid leaving a debtor with no means of support. For example, only a certain amount of work income may be garnished. Under 15 U.S.C.A. § 1673, a garnishment sought in federal court may not exceed 25 percent of the debtor's disposable earnings each week, or the amount by which the debtor's disposable earnings for the week exceed thirty times the federal minimum hourly wage in effect at the time the earnings are payable. In Alaska, exemptions include a burial plot; health aids necessary for work or health; benefits paid or payable for medical, surgical, or hospital care; awards to victims of violent crime; and assets received from a retirement plan (Alaska Stat. § 09.38.015, .017).

Because garnishment involves the taking of property, the procedure is subject to DUE PROCESS requirements. In Sniadatch v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969), the U.S. Supreme Court struck down a Wisconsin statute that allowed pretrial garnishment of wages without an opportunity to be heard or to submit a defense. According to the Court, garnishment without prior notice and a prior hearing violated fundamental principles of due process.

Garnishment may be used as a provisional remedy. This means that property may be garnished before a judgment against the debtor...