A legal procedure by which a creditor can collect what a debtor owes by reaching the debtor's property when it is in the hands of someone other than the debtor.
Garnishment is a drastic measure for collecting a debt. A court order of garnishment allows a creditor to take the property of a debtor when the debtor does not possess the property. A garnishment action is taken against the debtor as defendant and the property holder as garnishee. Garnishment is regulated by statutes, and is usually reserved for the creditor who has obtained a judgment, or court order, against the debtor.
A debtor's property may be garnished before it ever reaches the debtor. For example, if a debtor's work earnings are garnished, a portion of the wages owed by the employer go directly to the JUDGMENT CREDITOR and is never seen by the debtor.
Some property is exempt from garnishment. Exemptions are created by statutes to avoid leaving a debtor with no means of support. For example, only a certain amount of work income may be garnished. Under 15 U.S.C.A. § 1673, a garnishment sought in federal court may not exceed 25 percent of the debtor's disposable earnings each week, or the amount by which the debtor's disposable earnings for the week exceed thirty times the federal minimum hourly wage in effect at the time the earnings are payable. In Alaska, exemptions include a burial plot; health aids necessary for work or health; benefits paid or payable for medical, surgical, or hospital care; awards to victims of violent crime; and assets received from a retirement plan (Alaska Stat. § 09.38.015, .017).
Because garnishment involves the taking of property, the procedure is subject to DUE PROCESS requirements. In Sniadatch v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969), the U.S. Supreme Court struck down a Wisconsin statute that allowed pretrial garnishment of wages without an opportunity to be heard or to submit a defense. According to the Court, garnishment without prior notice and a prior hearing violated fundamental principles of due process.
Garnishment may be used as a provisional remedy. This means that property may be garnished before a judgment against the debtor is entered. This serves to protect the creditor's interest in the debtor's property. Prejudgment garnishment is usually ordered by a court only when the creditor can show that the debtor is likely to lose or dispose of the property before the case is resolved. Property that is garnished before any judgment is rendered is held by the third party, and is not given to the creditor until the creditor prevails in the suit against the debtor.
Garnishment is similar to lien and to attachment. Liens and attachments are court orders that give a creditor an interest in the property of the debtor. Garnishment is a continuing lien against nonexempt property of the debtor. Garnishment is not, however, an attachment. Attachment is the process of seizing property of the debtor that is in the debtor's possession, whereas garnishment is the process of seizing property of the debtor that is in the possession of a third party.
Lee, Randy. 1994. "Twenty-Five Years after Goldberg v. Kelly: Traveling from the Right Spot on the Wrong Road to the Wrong Place." Capital University Law Review 23.