Aug. 15, 2022
IF your wages or bank account are being garnished, you probably have a financial emergency. Can you keep up with all your other bills if up to 25% is deducted from every paycheck? After reading the information below, you may want to call us for a free consultation to explore your options.
WHAT DOES GARNISHMENT MEAN? Garnishment means a creditor is using the court system to forcibly take your money because of a past due debt. They can force your bank to send the court money out of your bank account, up to the full amount of your debt, or they can garnish your wages, forcing your employer (the “garnishee”) to send the court up to 25% of your wages out of each of your pay checks until the full amount is paid. The
creditor serves papers on your employer (or bank), stating that by law they must either start taking money out of your paycheck (or bank account), and send it to the court, which forwards the funds to the creditor.
WHO CAN FILE A GARNISHMENT? Any of your creditors, or any collection agency who has bought the rights to collect an old debt of yours, can file a garnishment against you once they have a judgment against you. It may be an old credit card or medical bill with a balance, a former landlord you didn’t pay, or a court judgment that you never paid. It may even be a bill from a friend or relative’s debt where you were a co- signer, and they stopped paying regularly or declared bankruptcy. Whatever the source of the debt, if you receive the bad news that your wages or your bank account are being garnished, it means they sued you, you lost, and now they’re garnishing you.
HOW CAN I HAVE BEEN SUED WITHOUT KNOWING ABOUT IT? If you have always lived at the same address all your adult life, it’s very unlikely. However, if you have ever moved, creditors may not have your current address.
Under certain circumstances they can “serve you by publication” in your last known county of residence— that is, they print a notice informing you of the lawsuit in that county’s legal notices newspaper. Depending on local politics, that may be an obscure little paper that almost no one gets, or it may be a main newspaper.
If you did not see the notice or receive word of it, you could have been sued and lost automatically for not answering.
Also, perhaps your household was served, and you were never told. A deputy sheriff can serve you by leaving the summons with “a person of suitable age and discretion” who is a member of your household; it may be your teenager or spouse forgot (or chose not) to tell you.
Worse, some sleazy collectors may even sue you in another county (perhaps one you have never lived in) just to get a judgment against you, then later file to garnish your wages (miraculously, they have your correct address this time), knowing that a lot of people will not bother (or cannot afford) to hire a lawyer to question this.
IS THERE ANY OTHER WAY SOMEONE COULD HAVE A JUDGMENT AGAINST ME THAT I NEVER WENT TO COURT ABOUT? Often when people are served by a deputy sheriff with a lawsuit summons, they just ignore it, hoping it will go away, or not realizing its gravity, or just not wanting to deal with it. All civil summonses have language in them that says you must file an answer to the lawsuit within 30 days of the date you received the summons, or else “judgment by default will be taken against you.” This means that if you do not answer, you will automatically lose the case without a hearing, and have a judgment entered against you. You can also automatically lose in court if you do answer within 30 days, but then miss the later court date.
HOW LONG DO CREDITORS HAVE TO FILE A GARNISHMENT AGAINST ME? Once a creditor obtains a court decision against you, a FiFa (Writ of Fieri Facias) can be issued, which in Georgia is good for seven years. A FiFa is a court document stating there is a judgment against you, which the holder can collect on. They can use it to garnish your bank account or wages, to put a lien on your property, or even to make the local sheriff seize any of your paid-for personal property — such as a car, a boat, expensive equipment or tools, work inventory, etc. — and auction it off to satisfy the debt. Even if they cannot find you for six years, if they locate an address for you the seventh year, they can garnish your wages or bank account for a court suit you lost seven years ago. And that’s not all. The FiFa can be renewed every seven years. So, you could conceivably be garnished for a debt 10 or 20 years old or more! People protest, “But that’s a lot longer than the six-year Statute of Limitations in Georgia! How can this be legal?” The answer is, the Statute of Limitations only applies to when a lawsuit can be brought; once there is a judgment, it can be collected as long as the holder is willing to renew the FiFa!
HOW A GARNISHMENT CAN COST YOUR EMPLOYER PLENTY? If a garnishment against your wages is served to your employer, and he/she/they either forgets or refuses to answer in the time allotted, or in some other way messes up the paperwork, the Court will force your employer to pay the entire amount of your past due debt (the garnishment) (Georgia Code 18-4-90, 18-4-92)! Wouldn’t that make them happy with you!
WHAT CAN I DO ABOUT A GARNISHMENT? Garnishments don’t go away by themselves. Although sometimes we can find legal problems with them, usually garnishments are a done deal. Here in Georgia, a judge from the court garnishing you won’t cut you any slack because “you can’t afford it” or “you didn’t realize you owed that” or “you can’t pay the mortgage.” They won’t want to waste time listening to any arguments you could have used had you answered and argued the case you already lost in which the judgment was issued against you. Their attitude generally is, “That’s too bad, but you should have thought of that before you ran up the debt.” When they take 25% out of your paycheck, you may not have enough to pay for housing, your car note, utilities, food, and gas. It may force you to miss mortgage or car payments, or even force you into foreclosure or repossession. Don’t ignore a garnishment.
There are only a few ways to stop garnishment. First, some people quit their job. This will stop a garnishment, but it is like cutting off your nose to spite your face. Why stop making 100% of your salary to keep from losing 25%? Besides, when you get another job, sooner or later they will garnish your paycheck there, too, so you will be right back where you started.
Occasionally the creditor will be willing to negotiate, especially if you go to them through an attorney. But they often want a large lump-sum payment. (If you had that, you probably wouldn’t be in financial trouble to begin with.) And many creditors are happy to just sit back and collect the garnishment, and not bother with any further negotiation.
The easiest and most foolproof way to stop a garnishment is to file bankruptcy. If the garnishment means you can’t keep up with your other bills, you already have a genuine financial emergency, whether you want to admit it or not. Is the alternative losing the roof over your family’s head? How will you get to work if your car is repossessed? Can you live safely if your electricity, gas, or water is shut off?
If you can scrape by on 75% of your salary until the garnishment is paid in full, good for you; if you can’t, deal with it now before you get behind on the mortgage or your car note. And also consider: do you also have other unpaid debt, or other lawsuits pending? The very day we file a bankruptcy for you, the creditor, the Court, and your employer are required by Federal law to stop any garnishment activity at once. All other pending lawsuits and collection activity must also stop. Call us if we can help you get out of your bind.
UNDOING THE DAMAGE If we file bankruptcy for you, it is sometimes possible (depending on the circumstances) for us to get back money that was already garnished from your wages. 11 USC §§ 522(h) and 547 provide that debtors can recover any money that was taken from them during the 90 days before they filed bankruptcy, if (1) the amount totals $600.00 or more, and (2) your attorney is able to show that the recovered funds can be claimed as exempt. Also, any funds that have been sent to the Court by your employer, but have not yet been sent on to the Creditor, can be returned to you.