The debtor may be working for someone and receive a regular salary or wage. In that event, the creditor can request the levying officer to take a portion of the debtor’s salary or wages directly from the employer. (This is called wage garnishment).
A wage garnishment is embarrassing to most employees and burdensome to most employers. Therefore, it may prompt the debtor to either pay off the judgment or agree to a payment plan. If the debtor pays in full, or if the debtor reaches an agreement on a payment plan, it’s essential to immediately send the levying officer written instruction to stop taking the debtor’s earnings.
Unless the debtor’s income is very low, a creditor may garnish up to 25% of the debtor’s net (i.e., after tax) income. 75% of wages are exempt from execution which entitles the creditor to 25% of the debtor’s net disposable earnings. A debtor may claim all of his/her wages as exempt.
After the clerk has issued the “writ of execution,” to levy upon wages, an “application for earnings withholding order” must be served upon the employer by the county marshal/sheriff or authorized officer of the court. Upon service on the employer, there is an automatic 10-day stay of execution, and the employer must then withhold from the judgment debtor’s wages for the 180 days or until the judgment is satisfied, whichever occurs first.
In the event the entire amount of the judgment is not collected, a memorandum of costs, credits and accrued interest may be filed and a new writ of execution issued, which may be served again upon the employer together with the application for earnings withholding. The debtor may petition the court to pay the judgment in installments, in which case the creditor has an opportunity to oppose or accept the payment schedule prior to the court’s ruling. In the event the debtor fails to meet the prescribed payment schedule, the creditor may petition the court to set aside the payment order and allow the execution of the judgment debtor’s assets in order to satisfy the judgment.
Application for Earnings Withholding Order
To enforce the judgment (that is, to levy execution) upon the debtor’s earnings, a writ of execution and an application for earnings withholding order is required.
The application for earnings withholding order and writ of execution must be delivered to the appropriate levying officer in the county in which the debtor’s employer is located, who will serve it on the debtor’s employer. The debtor’s employer is then required bylaw to withhold a percentage of the employee’s earnings from each paycheck. The amount withheld is set by law at approximately 25 percent of the judgment debtor’s take-home pay. Beginning 10 days after service of the earnings withholding order, the employer begins to withhold money from each paycheck, and continues to do so until the total stated on the writ of execution (plus the levying officer’s fee) is paid, or until the 100-day duration of the earnings withholding order has expired.
It is a criminal offense for the employer to fail to make the required payments to the levying officer. Once served, the employer has 15 days to complete and mail to the levying officer a report on the status and income of the judgment debtor. The employer must send the amounts withheld to the levying officer, and the levying officer will forward the money to the creditor, who can expect to be paid monthly. If the wage garnishment is successful, the creditor will eventually receive the full unpaid balance of the judgment, plus the fee charged by the levying officer. If the judgment has not been fully paid before the expiration of the 100-day duration of the earnings withholding order, the creditor can restart the process as soon as the sheriff has returned the writ of execution to the clerk of the court. Practical considerations.
Debtor’s Claim of Exemption
The debtor may file a claim of exemption. If all or part of the debtor’s earnings, are necessary for the support of the debtor or his or her family - such as food, clothing, housing, transportation, insurance, education, and medical services - the portion of the debtor’s earnings that is necessary for the support of the debtor or the debtor’s family is exempt.
If the debtor has filed a claim of exemption, the levying officer will send a notice of filing of claim of exemption, with a copy of the debtor’s claim of exemption and a copy of the financial statement that the debtor is required to file with the claim of exemption.
The creditor can oppose a claim of exemption if some of the expenses claimed on the financial statement are not necessary for the support of the debtor or the debtor’s family, or if there is more family income than the debtor has reported (such as the earnings of a spouse).
To contest the claim of exemption, the creditor need complete, sign and file two documents - a notice of opposition to claim of exemption, and a notice of hearing on claim of exemption. The original signed notice of opposition to claim of exemption must be filed with the levying officer; and the original notice of hearing on claim of exemption must be filed with the court. A copy of the notice of hearing must be filed with the levying before the court hearing. A copy of both documents must be mailed to the debtor, and also to any attorney for the debtor whose name is mentioned in the claim of exemption, at the address or addresses stated in the claim of exemption, and a proof of service must be filed with the court.
Court Hearing to Determine Claim
If the creditor opposes the debtor’s claim of exemption, the clerk of the court will schedule a hearing. At the hearing, the creditor and debtor may explain to a judge why the debtor’s claim of exemption is or is not legally valid.
Effect of Order Determining Claim of Exemption
At the conclusion of the hearing, the judge will either approve or disapprove the debtor’s claim of exemption, or the judge may adjust the amount of the earnings to be withheld.
If the debtor’s claim of exemption is approved, the creditor cannot normally request another wage garnishment until the later of 100 days after the earnings withholding order was served on the employer, or 60 days after the court ordered the termination of the withholding of the debtor’s earnings. Similarly, if the court denies the claim of exemption, the debtor cannot normally file another claim of exemption for the duration of the earnings withholding order. Only a change in circumstances would alter either of these rules.
Release of Earnings Withholding Order
After the levying officer has served the earnings withholding order on the employer, the debtor may contact the creditor and offer to pay the judgment in full or by installments, against the release the earnings withholding order, in which case the creditor must terminate the earnings withholding immediately after full payment of the judgment.