If a creditor sues you and gets a judgment against you, the creditor (now a “judgment creditor”) can recover the judgment amount by “garnishing” your wages and/or seizing certain property. In New York, garnishment is more officially known as “income execution.”
In practice, the creditor secures an order for income execution and serves it upon your employer. The employer then is required to deduct a certain portion of your wages each pay period and remit the withheld amount to the sheriff or marshal or other court official, who in turn transfers the moneys to the judgment creditor. The process continues until the amount of the judgment is paid in full or “satisfied,” or you cease to be employed.
What to Do if Your Wages are Being Garnished?
What can you do if your wages are being garnished or subject to income execution?
Each situation is different and the wage earner may be well served to confer with an attorney to consider all options, but here is a non-exhaustive list of certain considerations if you become subject to wage garnishment:
- Is the underlying judgment valid? You may be able to get the judgment vacated (set aside) if the judgment was obtained without appropriate due process protections.
- Has the judgment already been satisfied by previous payments made in the ordinary course or pursuant to a settlement with the creditor or collection agency?
- Has the judgment creditor given you appropriate credit for all prior payments made?
- Is the amount being garnished excessive in light of your gross pay and available exemptions? Various federal and state laws limit the amount of garnishments during any particular pay period. Make sure the amount does not exceed the appropriate amount.
- Are you already being garnished by another creditor? Multi-creditor garnishments may be prohibited in certain circumstances, particularly if applicable federal and state law limits have been exceeded.
- Can you pay the judgment creditor a discounted amount of the judgment in the form of a lump sum in exchange for a full release?
- Can you negotiate a payment plan with the judgment creditor to avoid wage garnishment, in exchange for a promise by the creditor to forbear from further garnishments and collection activity? It may be difficult to persuade a judgment creditor to rely on your promise to pay, when the judgment creditor can reasonably rely on the garnishment process.
- Is bankruptcy an option? Bankruptcy will stop a wage garnishment in its tracks and generally results in a discharge of the underlying judgment and a perpetual ban on further garnishments and collection efforts.
If you learn you are being garnished, keep calm and work your way through the foregoing considerations.
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