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Objective information on small claims judgement collection

Wage Garnishment

Wage garnishment is a process granted by the court by which a lender may obtain, through an employer, a portion of an employee’s salary when he/she is behind in payments to the creditor. It is one of the most often used garnishment methods, but it may not be the most successful.

The Law

The Federal Consumer Protection Act, Title 15, Chapter 41, Subchapter II §1671–1677 deals with wage garnishment; its restrictions, exemptions, and enforcement. Each state has its own laws and these will be discussed later in this article.

Federal law states that the maximum part of the aggregate disposable earnings that is subject to garnishment may not exceed 25% of those earnings; or 30 times the Federal minimum hourly wage, whichever is less. If the income amount is less than 30 times the minimum wage (30 x $7.25), no garnishment will be allowed. For clarification, aggregate disposable earnings or disposable income is the part of the earnings remaining after the deduction of any amounts required by law — normally your net income. State law cannot allow more money to be garnished than the Federal law allows.

Garnishment Procedures

While each state may have its own specific procedures for wage garnishment, in general the following steps should be followed:

  • File your lawsuit — if your claim falls within the small claims limit you will want to take that route, otherwise a more formal court will be necessary;
  • Go to court and if you win you will be awarded a judgment;
  • Make a demand for the payment of the judgment — this is required in some states if wages are involved;
  • Submit an application with required affidavit to the court — you will be issued a writ of garnishment which will be delivered to the employer by you or an approved server;
  • Garnishment will begin from the time the writ is received by the employer, and will continue until the debt is repaid.

What Earnings Cannot Be Garnished?

It has already been stated that, according to federal law, no more than 25% of the debtor’s disposable earnings can be garnished. Each state has its own laws, and while no more than that amount can be garnished, some of these states limit the amount allowable to even less — 20% or even 15%.

In addition, income from Social Security, Workers Compensation, disability, Unemployment, and other federal and state public monies are, in most instances, considered judgment proof and may not be part of a garnishment.

The Downside of Wage Garnishment

While wage garnishment may sound like the best option for collecting money that is owed to you because you are not depending on the debtor to pay the debt; it does have some disadvantages. First of all, you have to depend on the debtor to keep his job; and you may have difficulty keeping track of him if he loses his job. In addition a garnishment order applies to a specific employer, so another order would be necessary should he/she change jobs.

Secondly, he/she may be laid off from his job; begin collecting unemployment; and may file bankruptcy — then collection on that debt will end until the debtor is re-employed. While the Department of Labor protects employees from being fired as a result of a garnishment demand, it can and does still happen.

Thirdly, collecting a debt from someone who is self-employed may be very difficult because proving the business has a cash flow over and above expenses is complicated; and there would be no consistency in the payments even if you could show positive cash flow from time to time. The same issues may be a problem when garnishment is attempted on those hired as independent contractors.


While wage garnishment is an option when collecting a small claims debt, the process is not struggle free. The best option is to try your best to maintain a relationship with the debtor so hopefully you can work out a payment plan that will work for both of you. This is especially true if the debtor is someone that you will have a “relationship” with in the future. Wage garnishment is embarrassing for the debtor and will undoubtedly bring an end to that relationship.

Keep in mind that each state has its own laws so you need to be familiar with the procedures in your state. The following links provide state specific wage garnishment information:; and,

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Tip of the Week

September 27, 2010

If you have been awarded a judgment, waited the 30 days required, sent a demand letter giving the debtor a time limit for paying his/her debt; what should you do if you still have no money? You know that the court can do little, but before you take steps to garnish wages or bank accounts, consider suggesting negotiation or mediation if the debtor gives any impression that they want to settle the matter.

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