One of the most effective and financially damaging ways in which a creditor can collect a debt is through a process known as garnishment.  Garnishment is a court-ordered method of debt collection in which the personal property of a debtor, in the hands of a third party, is seized in order to satisfy a debt.  Generally, garnishment begins after a creditor receives a judgment, and then a writ of garnishment from the court to collect what is owed. 

 The most common form of garnishment is wage garnishment which is usually accomplished in two ways.  The first is by seizing your bank account in which the creditor is able to gain access to your account and make withdrawals directly from it.  The second method is when the creditor has received a court order allowing it to collect a percentage of your wages directly from your employer in order to satisfy the debt.

 Although the seriousness of wage garnishment cannot be understated, in most cases the debtor will at least have some notice that his wages might be seized, or that his bank account is about to be frozen.  Thanks to Due Process protections, a creditor cannot garnish your wages without first having a judgment.  This means that the creditor needs to have filed a successful lawsuit before it can move for the writ of garnishment to be issued.  Once the writ of garnishment has been issued, however, the debtor will usually not have further notice until after the wages have been withheld, or a hold has been placed on a bank account.

 When a writ of garnishment is ordered, it is sent directly to the debtor’s employer ordering it to withhold a certain percentage of the debtor’s income.  If the employer fails to withhold this money then the employer itself is potentially liable for the full amount.  Even though an employer is legally not allowed to discriminate against an employee who is having his wages garnished, it is still a potentially embarrassing situation for both parties.  Also, we have found that many employers find this process to be troublesome in many ways as abiding by the court’s judgment often requires extra work for the employer, and can be quite time consuming.

 Debtors do have some remedies at their disposal in order to help reduce the effects of garnishment.  The most common method is to try to file for one of Florida’s garnishment exemptions from the court that issued the writ.  The most generous of these exemptions is Florida’s Head of Household exemption which potentially allows a debtor, who earns more than 50% of his household income, to fully exempt his wages.  It is not uncommon, though, for a debtor to learn that they have waived at least a portion of this exemption when they applied for the loan or line of credit.  Another complication that arises is with small business owners, as a lot of times their income is not considered to be wages under the definition of the statute.

 Filing for bankruptcy protection is also another option to stop garnishments.  The moment that you file a bankruptcy petition, the bankruptcy court will issue an order called an “automatic stay.”  The automatic stay requires all creditors to at least temporary halt their efforts of debt collection.  This can sometimes last the duration of the case, or until the bankruptcy judge signs an order lifting the stay.  This means that all phone calls, lawsuits, foreclosure actions, and garnishment needs to immediately stop or your creditors will face legal action.  Futhermore, by filing for bankruptcy there is a good chance that the judgment can be cancelled, and the debt owed to that judgment creditor will be discharged along with your other debts.

 There are many different defenses to garnishment available to debtors that are facing a lawsuit or have creditors who have already received a judgment.  Many of these defenses are usually quite complicated.  If you are contemplating pursuing an exemption or filing for bankruptcy, it is important to contact an experience attorney who can help guide you through your options.

Jonathan Bierfeld is an attorney with Martin Law Firm, P.L., whose practice focuses in Bankruptcy Law and Civil Litigation.  He is admitted to practice law in the State of Florida and the Federal Court for the Middle District of Florida.  He primarily practices in Lee County Florida in Cape Coral and Fort Myers, Florida.