by Peter Bricks, a Buckhead bankruptcy attorney
Without a doubt, one of the leading reasons I get calls from debtors as a Cumming bankruptcy attorney is they have just been garnished. Either they received a notice from their bank that it is withholding funds from their account or their employer notified them that it is withholding part of their paycheck.
The garnishment statute in Georgia is generally set out in OCGA 18-4-20. Basically what you need to know is that as a general rule, if your paycheck is being garnished, you are going to lose approximately 25% of your take home pay until the judgment is satisfied in full. If however it’s your bank account being garnished, you could lose everything in the account immediately, depending on the amount of the judgment. The creditor can garnish up to the full amount of the judgment.
Please note there are nuances and exceptions to both paycheck and bank garnishments (for example, social security is not subject to garnishment); however, this article will continue under the assumption the nuances do not apply in your case.
So how should you deal with a garnishment? There are four main ways to deal with a garnishment:
– Allow the garnishment to continue:
Why would you allow the garnishment to continue? The most logical reason is the amount being garnished is rather negligible. In other words, the amount of the judgment is very small, or the amount already taken was fairly small, and the debtor does not believe the creditor will be able to garnish again.
For example, if all $200 of your bank account was garnished and the judgment is for $10,000, the debtor might want to just let that happen and no longer deposit new funds into this account. Remember that this account is under a continual court order to turn over the funds to the creditor.
The problem however with this approach is there is still a large judgment outstanding, so the creditor might later garnish the debtor’s paycheck or find access to more funds in a different bank account.
If the judgment is small, the debtor does not have to worry about this scenario. Therefore, paying the small judgment through a garnishment is most likely preferable to filing bankruptcy to extinguish the debt.
– File a traverse of the garnishment in State Court:
Outside of filing bankruptcy, the only way the debtor is going to get a court order to stop the garnishment is to successfully contest it in State Court. The process in Georgia to do that is known as a traverse.
The problem with the traverse option is “Judge, I think they are taking too much of my money” is not a valid defense. A valid defense is that the underlying judgment was faulty. Perhaps the debtor was never served with the initial lawsuit and never had a chance to contest the matter.
There are unfortunately several problems with this approach. For starters, the traverse requires the debtor to contest the judgment first. That judgment was another court case entirely and perhaps even in a different part of the state. Thus, the debtor will be dealing with two court cases at the same time.
Additionally, unless the debtor wins the challenge, the garnishment will probably continue. For example, if the debtor merely opens up a challenge by filing a motion to overturn the judgment, that is probably not enough to get the judge in the garnishing court to stop the garnishment. The judge will probably just allow the garnishment to continue but prevent the creditor from accessing the garnished funds. In other words, the debtor will still probably not have access to his lost paycheck funds and will merely be preventing the creditor from getting those funds at that stage. This hardly solves the debtor’s immediate problem.
Finally, even though the debtor might have a valid defense to the judgment in that he was never served, that does not mean the debtor has a valid defense once proper service is perfected. Accordingly, the debtor might just be delaying the inevitable anyway.
So if there is a valid defense, and this particular debt is not enough to push the debtor into bankruptcy, a traverse is a solid option. However, what I often find is the debtor is interested in filing bankruptcy anyway. In those cases, it’s a fool’s errand to traverse a garnishment where the debtor can just stop it via the bankruptcy route anyway.
– Negotiate a release of garnishment with the creditor:
Perhaps the debtor is not interested in filing bankruptcy, but also cannot successfully traverse due to a valid judgment. In that case, the debtor might want to approach the creditor and offer a lump sum settlement or just agree to pay a different amount per month than would be garnished out of the paycheck.
Why would the creditor accept such a deal? Let’s say the judgment is for $10,000 and the creditor is slated to get $400 per month via a paycheck garnishment. If so, the it would take the creditor a long time to get $3,000 of funds from the debtor, so the creditor might want to accept $3,000 immediately and end the matter. The debtor likes this option because he gets rid of $7,000 worth of long-term debt (note that he will most likely though also have debt forgiveness income for tax purposes).
– File bankruptcy:
Filing Chapter 7 or Chapter 13 bankruptcy will certainly end the paycheck garnishment. Perhaps the debtor doesn’t even want to file bankruptcy, but the creditor will not voluntarily release the garnishment through a settlement. The debtor might feel no other choice but to file bankruptcy, because he can’t pay his other bills if he loses 25% of his take home pay.
As mentioned above, if the debtor has sufficient other debts that filing bankruptcy anyway is probably inevitable, this option makes more sense. This is because the other choices don’t solve a long-term problem anyway.
The other advantage of this option is funds involuntarily taken from the debtor in the 90 days preceding the filing of a bankruptcy case can be recouped as a preference if they exceed $600, so the debtor might actually get the garnished funds back when he files bankruptcy.
Finally, I would like to mention that my colleague, Jim Fletcher, has written an excellent book on garnishments in Georgia. This book covers everything you need to know about garnishments in Georgia and is considerably more detailed than this article.
Peter Bricks is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA). He is a regular contributor to bankruptcyblog.org has bankruptcy attorney offices in Woodstock, Jonesboro, Cumming, Atlanta and Dunwoody.
I was sued by American Express for $ 8000+ and I answered all the summons but the court served them a garnishment judgement without me having a court date where I could talk to the judge. The garnishment was served to my credit Union, but they could not get much money so they dismissed the case without prejudice . A few months later they served another garnishment to a bank that I had closed couple years ago. Now they have again dismissed the case without prejudice. I would like to know as to how many tome can they keep going to court and get garnishment . I do not really want to file for bankrupty as I do not want to lose my house. Please advise.
This is a State matter and does not involve bankruptcy, which is federal. Your state law controls what steps the creditor can take to garnish. It sounds like the creditor has a legitimate garnishment. Therefore, generally speaking, the creditor will most likely be able to continue to garnish until the debt is satisfied or a bankruptcy is filed. However, every state has different garnishment laws, so you need to consult an attorney in your state.
Garnishments are subject to state law, so without knowing your state, I cannot properly answer this question. In Georgia, the creditor could continually attempt to garnish as long as the judgment is not considered dormant.
I just got word that I might be getting served for a garnishment in the state of Georgia. How long before they head to the bank to take all that’s in there?
There’s no particular timetable that a creditor has to act to collect on a judgment, so there is no way to accurately predict an answer.
A garnishment was placed on my bank account by my HOA’s lawyers, is it legal for the bank to take all my wages deposited in there to pay the garnishment? My wages is want I survive it being a single mother. I called the law group to see if I can negotiate a payment plan but they said they have to contact the HOA to see if they agree. I called the HOA myself to make arrangements but they said I can only talk to their lawyers. What other options do I have? If I file a bankruptcy, do I lose my home? I also contacted the bank, they told me that they are suppose to hold all funds until 3/5/18.
A wage garnishment is typically no more than 25% of your take home pay. However, this sounds like a garnishment of your bank account, which is different than a wage garnishment. Yes, a bank account garnishment can wipe out all of your funds in your checking account.
Bankruptcy would stop the garnishment and potentially get you back all the money. Your only other option is to work out a deal with the creditor, assuming the garnishment is legitimate.
My mom’s CD was garnished today for 10k on a debt she supposedly owed from 2007. She does not remember having this account She was never served papers prior to the garnishment but was served papers after the garnishment occurred . Her income is made up of Social security and Federal retirement Which makes up the CD funds .Are these funds exempt ? Shouldn’t she be served or should she have received a certified letter ?
Recently, I found a continuing garnishment in my name. This is from several years back, and appears to be the result of an eviction in GA. I was present in court for the eviction proceedings, but I never received a garnishment notice. In fact, I believe, I was fired once my employer got wind of it, so I was never properly served. To date, I have never been served. Questions: What’s the best way to approach addressing the debt? What recourse do I have, considering I was never notified of the garnishment? Is it legal to fire someone because of a garnishment? If not, what can I do about that?
A garnishment would be a separate proceeding than the eviction. The first question is whether the eviction just got you out of the property or also resulted in a money judgment against you. Assuming the landlord got a judgment against you and it is valid, the landlord can the initiate garnishment proceedings. If the garnishment is invalid, you can “traverse” the garnishment. However, I cannot tell from your question whether you in fact have a good argument to traverse it.
My garnishment was released and I received an email from the state magistrate court to submit an Application for Condemnation to request the remaining funds in the court registry. I did but after almost a month, I did receive the funds. When I called the court, court employees informed me that the funds had been mailed to me, but instead the court mailed the funds to the Plaintiff. The case is being appealed.
I was notified by payroll via company email that my wages will be garnish again starting in April 2018 by the same Plaintiff. Is it legal for an employer in Georgia to notify an employee via company email about a garnishment? Is there anyway to stop the garnishment until the appeal goes through the court process without filing bankruptcy. I do not want to file bankruptcy for a fifteen year old credit card debt that I have been trying to settle to no avail.
Thanks.
Without knowing why the garnishment was released, I cannot know whether there were then valid grounds to start a new garnishment of your wages. Your employer might have provided you notice of the garnishment as a courtesy, but notice should have separately come from the garnishing plaintiff. You can attempt to stop the garnishment by filing a traverse. I’m not sure based on your facts whether that will work, but that is the process to challenge the garnishment.
4-7-2008 There was a default judgement against me.
9-3-2015 CERTIFICATE OF SERVICE OF DISCOVRY FILED.
10-11-2017 GARNISHMENT-AFFIDAVIT Filed.
Is this legal? I thought Georgia judgments are good for seven (7) years. If not renewed prior to the seventh year, the judgment
will become dormant and will be unenforceable.
A judgment in Georgia is dormant after seven years, but it can be renewed in the three following years via a nulla bonna. Therefore, since you are in the 10 year window, it’s possible the judgment was revived (assuming it was not renewed prior to the 7 years expiring), and is still in fact a valid judgment. If so, the garnishment would likely be valid.
Hello I was garnished a year ago from a rental property. He received all of the money owed to him. In November of 2017 he tried to garnish my pay again and the case number he provided was fraudulent. Last month he tried again and successfully got a garnishment. My question is it possible to be garnished for the same thing twice? Thanks for your help.
If your numbers are correct and the judgment is paid in full, a subsequent garnishment would be fraudulent. You would want to file a traverse to contest the garnishment and prove to the judge the judgment was paid in full previously. Separately you might have a fraud claim this guy.
I have had a wage garnishment placed on my wages. I received a notice from the collector/lawyer yesterday and the Sheriff gave my employer a garnishment the same day.I did not receive anything until the certified letter from the lawyer yesterday. When did they stop having a notice handed to you and you have X amount of days to rebut the debt or go to court at which time the judge would render his judgement (usually a wage garnishment)? I am retiring at the end of May from teaching at which time I will receive TRS teacher retirement from Georgia and social security. I do not want my bank account garnished, can the garnish Georgia TRS and social security>
A wage garnishment is a collection action on a judgment. The judgment is presumed valid, so there’s no automatic rebuttal. If the judgment is faulty, you can challenge it by filing a traverse. This will work if the judgment is faulty and not because you don’t like the fact they are garnishing you.
No, social security cannot be garnished.
I have recently received notice that a creditor has filed in a different county in Georgia prior than the first garnishment being released a little over two months ago. I no longer lives in the state of Georgia. The Judgment was entered in Clayton County and two 6 garnishment terms was that administered. The most recent notice is from Gwinnett County Magistrate Court garnish from by same employer. From the information provided i.e. not living in the state of Georgia any longer, garnishment issue and judgment and one County, and then another garnishment from same creditor issues in a different County to same employer, can you see any legal reasons to cease/delay or stop upcoming garnishment that is about to happen
A garnishment is a collection action against a third party that is holding funds owed to you. Since it’s an action against the third party, the venue is determined by the appropriate venue for the third party and not yours. Therefore, it does not matter that you do not live in Georgia. The venue can still be valid.
You might have valid reasons to attack the garnishment (example: judgment amount has been paid in full), and could “traverse” the garnishment on those grounds. However, the fact that you currently do not live in Georgia or the fact that you have been garnished on this debt previously in different courts, is not going to invalidate this garnishment.
If have an order for a non earnings garnishment, can you garnish more than once if the first garnishment does not satisfy the amount that is due? If you can only garnish once, what other options would you have in order for the other party to satisfy the remainding balance? This is for the state of Georgia
Yes, you can garnish multiple bank accounts to satisfy the balance. You can also record a lien (aka fifa) and levy against personal and real property.
My mother was garnished by a company that put her accounts into negative by nearly $40,000. Can they do that? She was not notified or served.
This was a business loan taken out by her ex-husband about 2 years ago. During the divorce ruling he was granted the business. Her name is not on the loan and it is not on her credit but her info must still be associated with the business. They can’t find him anywhere and neither can we.
This is an impossible question to answer given the few details provided. For example to name a few, was this in Georgia? Was there a valid underlying judgment against your mother, and was she served in that lawsuit? Is the account garnished one that she co-owns with her ex-husband?
My child had medical bills in Kansas City, MO, those bills went under my wife’s name since she arrived at the hospital before I did. We were living in Bentonville, AR at the time. We tried to create payment plans with the debtor, first the hospital then the debt collection agency, neither would work with us and wanted payment in full. Collection agency served my wife with court papers and unfortunately we were unable to appear in court, we had moved back to GA, I was laid off from my job. Now they have put a hold on our bank account, can they take the funds from a joint account, what if my wife is a secondary on a bank account, ex; our kids savings accounts? Thank you for the advice.
Creditors can garnish an account that belongs in full or in part to a debtor against whom they have the judgment. If that account is owned with someone else, that party can challenge any money taken from them via the garnishment as an innocent party if they can establish under Georgia law that the funds did not belong to the debtor. This process is called a traverse, and is fact specific.
I live in Georgia. My husband has debt from a credit card. He is going to court on May 9th due to the debt not being paid. I am not a co-signer on the account. Can they garnish my wages for his debt in Georgia if we have a joint checking account? Can I move my wages to an individual checking account to avoid garnishment of my wages which are a direct deposit from my employer?
If the creditor gets a judgment, they can garnish his bank account. If you happen to be a co-owner on the account, it is possible the funds you contribute to the account will be garnished too in that scenario. Depending on the amount of the debt and his ability to pay it, he can hopefully work out a repayment plan with the creditor on May 9, which would prohibit the creditor from garnishing his wages or bank account as long as he does not default.
It sounds like it’s prudent for you to have your own separate account now.
My checking account was garnished. I have deposited the amount of money owed plus more. How long before they release my acct so that I can use it
I can’t answer that with specificity and this will depend somewhat on bank policy, but assuming nothing gets filed that would stop the garnishment (i.e., a traverse or bankruptcy), the garnishee (the bank) should presumably pay into the court the full amount of the garnishment around 30-45 days after being served with the garnishment. After payment, I you would likely then have access to the account again.
American Express has filed a garnishment $10000+ on me. I called the collector and requested a lump sum settlement option. The collector proposed to settle at $7800, I told him that I could do $7,000. He said he’d confirm with the law firm. The law firm said they have to receive a confirmation from my bank that the hold was placed. I called the bank to urgently confirm to the hold to the law firm. They did that very same day. The collector requested that I call them to see if they have received a confirmation from their law firm on settlement. It has been more than a week now that I have daily (twice a day) called the collector, as per their request, to know if they have heard from their law firm. Every time the response is, “I haven’t heard from our lawyers.” Yesterday, I asked the collector if it were OK for me to call their lawyers directly, and the collector said “yes” and gave me the law firms number. I called the number and it rang repeatedly and then the line disconnected. I called the collector and told him. He experienced the same. What are my options? Should I go back to court to let them know that I’m wanting to settle however the law firm is unresponsive.
I’m not clear if you are in Georgia or not. One option since you are having difficulty reaching the lawyer is to find his email from his firm’s website or the State Bar, and see if you can handle it that way. The problem is the bank is under no obligation to do anything other than follow the court’s orders, so they are just a middle man. I’m also not clear from your post how much money is in your bank account and how much therefore would be turned over to the court absent a settlement.