Wage garnishment, or as it is also known, income execution, is a process by which money is deducted from an employee’s paycheck to pay a debt. A wage garnishment can only come after the creditor receives a judgment from a court, and then is limited to 10 percent of the employee’s gross wages.
Before a Creditor Can Garnish Your Wages in New York, They Have to Sue…
Before wage garnishment can take place, the creditor has to sue the employee in one of New York’s courts. When a suit is brought, papers are filed with the court and then served on the person who owes the money who is the defendant in the legal action. The defendant has a short period of time, sometimes as little as 20 days, to put in an answer with the court. Putting in an answer is simple, but it requires either hiring an attorney, or simply going to the court and filling out papers that will be provided by the court’s clerk. Most people do not bother to put in an answer, and the creditor takes a judgment by default.
When a defendant does put in an answer, the case goes before a judge who decides whether the money is owed. If the judge does decide that the money is owed, or if the defendant defaults, the court enters a judgment against the defendant.
Wage Garnishment is One Way to Enforce a Judgment
Once a judgment is entered, the creditor has to enforce the judgment. One of the ways a creditor can do this is with a wage garnishment. A wage garnishment is begun when the creditor, who now has a judgment, sends an income execution to the Marshal or Sheriff. This first set of papers is often referred to as the first stage. The Marshal or Sheriff then sends a notice to the defendant, telling the defendant that he or she has 20 days to make an arrangement with the Marshal or Sheriff to pay the debt. If the defendant makes such an arrangement, no papers are sent to the defendant’s employer and there is no wage garnishment. The defendant then pays off the debt through the Marshal or Sheriff.
If the defendant does not make an arrangement, the Marshal or Sheriff returns the income execution to the creditor informing the creditor that he was unable to collect. The creditor then sends a second set of papers to the Marshal or Sheriff with directions to now serve a wage garnishment on the defendant’s employer. This is referred to as the second stage. Upon receiving these papers, the employer will now deduct 10 percent of the employer’s gross wages and send that money to the Marshal or Sheriff, who will then send the money to the creditor to be applied to the debt.
The Marshal or Sheriff adds their own fees to the total, and interest continues to add to the total until the judgment is paid. There can be only one garnishment at a time. This means that if an employee is sued by two creditors, the second one will wait until the first one is paid off, again adding interest while waiting. If the employee files for bankruptcy at any time during the process, the wage garnishment stops immediately.
These rules apply to lawsuits over debts. If the employee owes child support or spousal support, the amount of support is deducted from the salary without the intervention of a Marshal or Sheriff. In addition, the amount deducted is what the court determines as the support, and is not limited to 10 percent, but can be up to half of the wages, and sometimes more. Also, if there is a regular wage garnishment, the support is paid in addition to the 10 percent for the garnishment.
Through an injunction called the automatic stay, filing for bankruptcy will immediately stop a wage garnishment. If you’re struggling with overdue bills and creditors are threatening garnishment, call my office to schedule a free consultation.
Allan Bloomfield practices bankruptcy law in Forest Hills, Queens. Contact Allan today for a free consultation.