When a debtor fails to pay his obligation and demand letters from the judgment creditor and his collection agents prove to be futile, the next step would be to file a claim against him before the small claims court. When judgment is rendered in favor of the creditor he must move to collect the debt; the court will not automatically make collections for him. Within the prescribed period from the day the judge signed his order, the judgment creditor may move to collect payment of the debt by: 1. Filing a Writ of Execution. Ask the sheriff to implement the court’s order and seize the property or properties of the debtor. The same thing can be done with respect to the debtor’s banks account(s). 2. Garnishing the Debtor’s Wages. First of all, what is garnishment? "Black's Law Dictionary" defines garnishment as "a judicial proceeding in which a judgment creditor asks the court to order a third party who is indebted to the debtor to turn over to the creditor any of the debtor's property (such as wages or bank accounts) held by that third party." It is a process that primarily involves verifying that the garnishee has money due to the debtor, and ordering that some portion of this money be turned over to the creditor to satisfy the judgment. Typically, a judgment creditor requests the state court to issue a writ of garnishment. Once either the clerk of the court or a judge signs the writ, the writ will be served on the debtor, the third party (the debtor's employer) and the Washington Attorney General's Office. Each state have their own laws about Garnishment. The State of Washington’s garnishment law is Chapter 6.27 RCW. If the judgment creditor knows where the debtor works (employer, address of employment, wage he is earning), he can ask the court to garnish the debtor’s wages; this is known as a Writ of Garnishment. Garnishment may be periodic (garnishment by installments) or non-periodic (one-time garnishment). Some states like Michigan require the Garnishee (usually the employer) to fill a Garnishee disclosure form which is a calculation sheet. Income tax refunds may likewise be garnished. First of all, not all income may be garnished by the judgment creditor. Judgment creditors cannot garnish income from retirement accounts, IRAs, public pensions, unemployment compensation and Social Security income. The power of a Writ of Garnishment is not absolute because there are limitations to garnishment. Title III of the Consumer Credit Protection Act (a federal law) limits the amount of wages that can be garnished from an employee's paycheck. The garnishee-employer must use one of these two limits that results in the least amount of wages being withheld: (1) The judgment creditor can take 25 percent of the debtor-employee’s disposable earnings, or (2) anything that he earns that is in excess of 30 times the federal minimum wage. To arrive at disposable income, the Garnishee-employer shall deduct payroll taxes and pretax voluntary deductions (examples: pretax medical plan or a traditional 401k plan) from the debtor-employee’s gross earnings. In Washington, 75 percent of the judgment debtor's income or 40 times the minimum wage (whichever is greater) is exempt from garnishment. That means the judgment creditor only can garnish 25 percent of the judgment debtor's wages at a maximum. Interest accrues on money judgments in Washington. In other words, when a judgment debtor fails to pay a judgment interest accrues on the amount. Washington law places a maximum interest rate on judgments at 12 percent. Title III of the Consumer Credit Protection Act applies in all 50 states and covers anyone who works for wages or salary or derives income from certain retirement or pension plans. Income includes commissions and bonuses, but not tips. Federal agencies such as the Internal Revenue Service (IRS) and federal student aid, and state agencies can garnish wages even without a court order. When the federal government garnishes a debtor’s wage, it is called a levy. Although these agencies need not go to court to obtain an order to garnish, due process dictates that they serve the debtor with a bill of payment and a notice to garnish or levy before they can actually proceed with the garnishment. Fifteen percent of the debtor-employee’s disposable income can be garnished for federal student aid. In every notice to levy sent by the IRS to the Garnishee-employer, it includes IRS Publication 1494 to figure wages exempt from the levy based on the employee's pay period, filing status and number of exemptions. Title III of the Consumer Credit Protection Act likewise protects the debtor-employee from being discharged because of a single wage garnishment. On the other hand, the debtor-employee loses this protection if the Garnishee-employer receives more than one wage garnishment against him. While wage garnishment orders are processed in the order that they are received, garnishments for alimony and child support are prioritized. Garnishment orders may be carried out simultaneously as long as the total deduction does not exceed 25 percent of the employee-debtor’s disposable pay. A Garnishee-employer can withhold up to 50 to 60 percent of disposable pay of the debtor-employee in alimony and child support cases. Moreover, he can also withhold an extra 5 percent for support payments that are more than 12 weeks late. Statute of limitations sets a maximum time period when a judgment creditor can wait to enforce the judgment debtor's obligations. Statute of limitations vary from state to state and will all depend on where it is being enforced. For example, in the State of Washington, if a judgment debtor owes $5,000 on a defaulted credit card and stops making payments, the judgment creditor must seek to enforce the debt before the State’s statute of limitations runs out - three years. For other domestic judgments, the judgment creditor has 10 years to seek to enforce the debt. 3. If the judgment creditor does not have any information about the debtor’s employer, address of employment, wage he is earning, he can subpoena the debtor, make him appear in court and compel the debtor to submit a discovery affidavit ( sometimes called Affidavit of Disclosure) so that he can apply later on for a Writ of Garnishment. The judgment creditor can also move to have the debtor cited for contempt of court if the latter stubbornly refuses to respect the court’s judgment. The debtor can always move to quash the garnishment; however, there are very few situations where the law allows quashing of garnishments (usually procedural, or based in income exemptions). This blog is not legal advice, but shares information on the law. We are living in hard times; people lose their jobs and many are struggling to make ends meet. 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