Imagine going to work on Friday morning expecting to be paid at the end of your shift. When pay stubs are being handed out, yours comes with a notice saying that your wages have been garnished. One of your creditors is now taking money from your paycheck to pay off an outstanding debt.

Garnishment is a popular tool among debt collectors. Though limits are placed on the amount of money that can be garnished in a given week, the tool itself guarantees creditors will be paid as long as you keep working and producing disposable income.

Wage and Bank Garnishment

If you were served with only wage garnishment, you would probably consider yourself lucky. Why? Because there is another type of garnishment. It applies to your banking assets. In other words, money in your savings account could be garnished to pay your debt.

Of course, all of this is subject to the laws in your state. Garnishment is not a matter of federal law. It is a matter left to the states, and we all know how different state laws can be.

Judgment Collectors is a Salt Lake City, Utah collection agency that specializes in court judgments. They recently published a blog post discussing why it is important to understand garnishment laws. According to that post, Texas is one state that severely restricts wage garnishment. Their restrictions on bank garnishment are a lot more liberal.

How the Process Works

Regardless of the actual details of your state’s garnishment laws, the process for establishing garnishment is pretty similar across the country. It starts with a judgment entered against the debtor in court. That judgment is a legal recognition that the debt exists and that the debtor is compelled to pay it.

Should the creditor or its designated collection agency choose to utilize garnishment, the next step is to complete the appropriate paperwork and file it with the local sheriff’s office. The sheriff then serves the employer, bank, or both.

When employers are served with a garnishment order, they are compelled by law to comply with it. It is their responsibility to learn how wage garnishments are calculated according to state law. They make the calculations and begin withholding that amount from the debtor’s regular paychecks. The money is turned over to either the court or a court-designated entity and put towards the debt.

When a bank is served, it typically has a certain amount of time to turn the garnished funds over to the court. The bank might also be required to freeze the account so that no funds can be withdrawn in the interim.

Ending the Garnishment

With both types of garnishment, withholding and payment continue until either the debt is satisfied or an order to cease is received from the sheriff. Employers and banks that choose to not fully comply with garnishment orders can be held legally accountable.

As for debt collectors, garnishment serves two purposes. The first is to begin receiving money on the debt in question as quickly as possible. The second purpose is to encourage debtors to find other ways to pay. If they do not want their wages garnished or their bank accounts seized, they may be motivated to liquidate some other assets to pay the bill. Garnishment gives them a particularly good reason to cooperate rather than continually attempting to avoid payment.

And that is garnishment in a nutshell. If there is an outstanding judgment against you and you haven’t made appropriate payment arrangements with the creditor, don’t be surprised to find your wages or bank account garnished.