Problems With Employment Locates
You have need to garnish someone’s wages. We’re assuming that you probably have some sort of Money Judgment against your Subject. Or, you’re trying to find out if someone is employed BEFORE taking legal action. There are some in the Judgment Enforcement Business that perform these searches all the time, and swear that’s it the best way to recover debt. Personally, I would try to levy on bank accounts first. The reason being, a great many debtors these days don’t have a “professional” job, and will most likely quit after one paycheck is garnished. If that’s the case, you’re out a sizable amount of money. Here’s an example:
- You spend anywhere from $50.00 – $300.00 hiring someone to find where your Subject works
- You spend around $50.00 filing paperwork with the Courthouse and getting a Writ of Execution
- You spend around $50.00 in Process Server/Sheriff fees
Let’s say you’re successful in finding the place of employment. You serve the earnings withholding order, and your Subject’s employer garnishes his paycheck. Your Subject gets paid every two (2) weeks, and by law – in most States – you can only garnish 25% of the Disposable Earnings per paycheck. Scroll down a bit further for some great information on exactly how the “25%” works.
Anyway, so….your Subject makes $1500.00 every two weeks. After taxes and other deductions, he’s left with $1000.00. If you take 25% of that, you get $250.00 from the Sheriff. Yes, the paperwork usually goes through the Sheriff’s Department. That’s not bad, and over a few months or years, it’s a steady stream of income and you can probably have your Judgment paid off in no time. But what if your debtor quits his job? You’ve already spent around $250.00 to get the initial garnishment rolling, and after the first garnishment, you’re lucky to be back to even. You start all over again.
And what if your debtor has other exemptions? Social Security, retirement, child support, alimony, disability, etc. These are just a few of the types of exemptions he can claim. And, what if someone else is already garnishing his wages? It’s maximum 25% TOTAL – not per individual garnishment.
It’s absolutely CRUCIAL that your debtor has a good job. A job that he’s not likely to quit. I’m sure there’s some exceptions, but most people with menial jobs will quit after the very first garnishment – or shortly thereafter.
And, let’s not forget these so-called “Employment Locators.” It could be a Private Investigator, a Process Server, or some other sort of “Information Broker.” Be very careful here. We here at Skip Trace Pros stopped performing these types of searches mostly because of the legalities. Anything having to do with a debtor’s finances, which we believe includes employment, falls under the laws of the GLB. Not good – consult an Attorney. We recommend finding the debtor’s employment by yourself, and you can get some great tips here:
The below is from www.garnishmentlaws.com. I copied it word for word, and it does a pretty good job of explaining U.S. Wage Garnishment Laws.
U.S. Wage Garnishment Limits
If your earnings are subject to wage garnishment, federal and state laws set forth specific limits as to the total amount that can be withheld for garnishment purposes. While there may be various wage garnishment calculators available online, the process of determining the maximum amount that can be legally garnished is fairly straightforward.
Regardless of how many garnishment orders are received, Title III of the Consumer Credit Protection Act (which establishes federal garnishment law) limits the total amount of earnings that can be garnished to which of the following two calculations results in the lesser garnishment.
- 25% of the employee’s disposable earnings
- The amount by which the disposable earnings are greater than the current Federal minimum wage multiplied by 30
Disposable earnings are defined as the amount that remains after all deductions that are required by law (such as taxes) have been taken from your paycheck. Other withholding, such as those for health insurance or union dues, aren’t included when calculating disposable earnings.
Note that if the amount of disposable earnings is more than $217.50 (30 times the 2011 federal minimum hourly wage of $7.25,) but less than $290, only the amount over $217.50 can be garnished (and not the full 25%.)
This means that:
- If your disposable income is $217.50 or less, no garnishment can take place.
- When your disposable earnings are more than $217.50, but less than $290, only the amount over $217.50 can be garnished.
- If your disposable earnings are more than $290, 25% of this amount can be garnished. For example, if an employee has a disposable income of $368, 25% of this amount, or $92, can be garnished, and the employee would be paid $276.
There are exceptions to this rule, however. Title III permits a larger amount of your wages to be subject to garnishment for bankruptcy, child support, or state or federal tax payments. Up to 50% of your disposable earnings can be garnished for child support or alimony if you’re supporting a new spouse or child (other than the one which is the subject of the order,) and 60% if you aren’t doing so. A further 5% may be garnished for support payments that are more than 12 weeks overdue.
When pay periods cover more than one week, multiples of weekly restrictions must be used to calculate the maximum amounts that may be garnished. So if you’re paid on a bi-weekly basis, when disposable earnings are at or above $580 ($290 x 2) for the pay period, 25% may be garnished – even if your disposable income for one of the two weeks was less than $217.50.
If more than one party is attempting to garnish a worker’s wages, there may not be enough money available to satisfy all of the garnishees. Still, the total amount being garnished for all parties can’t exceed the legal maximum. In these cases, any federal tax garnishments would have first priority, followed by local tax garnishments, and then other commercial garnishments.
Any disputes over the priority of garnishments would be handled by the court that issued the garnishment order. This court is also the means by an employee could attempt to get a garnishment dismissed or modified.
These garnishment restrictions don’t apply to some bankruptcy court orders or to debts related to overdue federal or state taxes, and if a state garnishment laws differ from the Consumer Credit Protection Act, the law resulting in the lesser garnishment amount must be observed.