Garnishment is a legal process where a creditor can collect a debt from a debtor by obtaining funds from a third party who owes money to the debtor.  Think of it like a detour for the money.

How garnishment works

• Obtain a judgment: Before garnishment can occur, the creditor must first obtain a judgment against the debtor in court. This judgment confirms that the debtor owes a specific amount of money.
• File for a Writ of Garnishment: The creditor files a Writ of Execution (often referred to as a Writ of Garnishment) with the court. This legal document authorizes the creditor to seize the debtor’s assets or wages.
• Serve the Writ: The creditor must serve the Writ of Garnishment to the third party that holds the debtor’s assets. This third party could be the debtor’s employer (for wages) or a bank (for account funds).
• Third Party Obligation: Once served, the third party is legally required to withhold the specified amounts from the debtor’s income or account and remit those funds to the creditor until the judgment is satisfied, or until the court orders otherwise.
• Notice to Debtor: The debtor is usually notified of the garnishment process and has the opportunity to contest it in court, particularly if they believe the amounts being garnished are excessive or if they qualify for exemptions.

Examples of garnishment:

• Wage Garnishment:

A creditor obtains a judgment against a debtor who owes $10,000. The debtor works for a company that is served with a Writ of Garnishment. The employer is required to withhold 25% of the debtor’s disposable earnings (the amount left after necessary deductions) each pay period and send those funds directly to the creditor until the judgment is paid or reduced according to local laws.

• Bank Account Garnishment:

A creditor successfully sues a debtor for a $5,000 outstanding debt and secures a judgment. The creditor identifies the debtor’s bank and files for a garnishment. The bank is served with the Writ of Garnishment and must freeze the debtor’s account up to the amount awarded and transfer those funds to the creditor after complying with legal processes.

• Tax Refund Garnishment:

A debtor owes money to the IRS. The IRS can issue a tax refund garnishment by intercepting the debtor’s tax refund and applying it towards the owed tax debt.

And about limitations and protections, certain types of income or funds may be exempt from garnishment, such as unemployment benefits, Social Security benefits, or retirement accounts, depending on state and federal laws. Also There are usually legal limits on how much can be garnished from wages to prevent undue hardship on the debtor. For example, garnishment may be limited to a percentage of the debtor’s disposable income.

Don’t forget that debtors have the right to contest the garnishment in court, especially if they believe the amount is incorrect or if they are facing financial hardship. They can also request a hearing to discuss exemptions or challenge the validity of the debt.

Garnishment acts as a powerful tool for creditors to enforce their judgments and collect debts while ensuring that there are legal mechanisms in place to protect debtors from excessive or unfair garnishment practices.