March 2015 > An Overview of Non-Earnings Garnishments

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An Overview of Non-Earnings Garnishments

By Meghan P. MacKelly, Non-Equity Partner/Post-Judgment

Litigation Supervisor


In some cases after a creditor secures a judgment against a debtor, the creditor may proceed with a non-earnings garnishment action against a third party (i.e., a “garnishee”) to collect money or property owed by the garnishee to the debtor.  In other words, when a third party possesses a debtor’s property (e.g., a tenant’s rental payments to a landlord or a contractor’s payments to a subcontractor), a non-earnings garnishment allows a creditor to intervene in these relationships to divert money to the creditor.


Unlike an earnings garnishment, which can recover debt through intercepting wages, salary and commissions, a non-earnings garnishment recovers debt through a debtor’s property, such as bank accounts, rental income, and other “non-wage” earnings.  Also, unlike garnishments, neither poverty guidelines nor the receipt of public assistance limit the ability to collect from a non-earnings garnishment action.


Types of Non-Earnings Garnishments.  Typically, there are three types of non-earnings garnishments: (1) bank; (2) rent; and (3) “self-employment” or “contract” income. 


Garnishments of Depository Accounts.  Commonly known as “bank garnishments,” these garnishments involve satisfying the debt from the funds in a debtor’s depository account (including the contents of a safe deposit box).  The creditor does not need to know the actual account number; knowing the bank name is usually sufficient to attach the bank funds.


An exemption exists for personal bank accounts, which protects the first $5,000 of a debtor’s depository accounts.  Also, some funds (e.g., social security) are completely exempt from a bank garnishment.  After all non-exempt funds are protected, the remaining balance is subject to the garnishment.  However, business bank accounts have no exemption and the entire depository account balance at the time of service is subject to garnishment.


When the garnishment action is served on the bank, the funds in the debtor’s account are “frozen.” The non-exempt portion of the account balance existing at the time the garnishment was served on the bank is subject to garnishment.  Accordingly, to prevent the debtor from removing the money or otherwise interfering with the garnishment, the bank should be served before the debtor is served.


Garnishments of Rental Income.  If the judgment debtor receives income from rental property, a rent garnishment may be filed naming the tenant as a garnishee.  The garnishment of rental income may be continuous and intercepts all the monies “due and owing” by the garnishee to the debtor/landlord.  In other words, the creditor does not need to repeatedly file a garnishment action in order to capture each rental payment from the tenant.  The garnishment may stay in place to obtain subsequent rent payments until the debt is satisfied or the lease expires, whichever comes first.


Garnishments of Self-Employment and Independent Contracting Income.  In addition to bank and rent garnishments, a creditor may also garnish income from self-employment and independent contracting.  This is often the case when the debtor is a construction subcontractor or a self-employed plumber, real-estate agent, or other tradesperson. 


An advantage to this type of garnishment is that payments from the garnishee to the debtor tend to be significant and many exemptions that exist with wage garnishments do not exist in these scenarios.  Unlike a wage garnishment, this is a one time “catch all” garnishment.  Thus, timing is critical to the collection because the garnishment action must be served on the garnishee during the period when the monies are due but have yet to be paid to the debtor.


Procedure.  Much of a non-earnings garnishment’s success depends on following the specified procedures and strategic timing.  Initiating non-earnings garnishments involves drafting a non-earnings garnishment summons and complaint, filing the papers with the court, and paying a filing fee.  Then, a process server must serve the summons and complaint on the garnishee and debtor.


As a general rule, it is in the creditor’s best interest for the garnishees to be served before the debtor is served.  As noted above, this method can limit the debtor’s ability to interfere with the collection efforts.  Further, the timing of service may also affect how collectible the garnishment will be, such as intercepting payments to independent contractors or rental property owners.


The garnishee must file an answer to the non-earnings garnishment within 20 days of service or appear at a return date, depending on the county.  If the garnishee fails to file an answer within the required 20 days or appear at the return date, the creditor may receive a judgment against the garnishee in the amount of the creditor’s judgment against the debtor.  If the garnishee timely files an answer and the creditor disagrees with the representations in the answer, the creditor may file an objection to the answer and request a hearing in which the court will determine the validity of the parties’ positions.  If the garnishee timely files an answer and the creditor agrees with the answer, the creditor will obtain an order for specific payments from the garnishee.


The costs involved in filing a non-earnings garnishment action include the filing fee referenced above, which varies from small claims to large claims court, and from county to county.  Also, a service fee exists for serving the summons and complaint on the debtor and garnishee.  Furthermore, a $3 garnishee fee must be served on each garnishee.  The filing fee and up to $40 in disbursements are recoverable.  Any disbursement amounts above $40 are non-recoverable and cannot be added to the original judgment amount.


Conclusion.  Non-Earnings garnishments are an invaluable alternative to the traditional wage garnishment.  This article has touched on only the most common forms of non-earnings garnishments.  However, we have a team of lawyers and staff whose primary focus is to handle all garnishment matters.  Therefore, if you have questions regarding a garnishment or strategizing about your garnishment options, please contact our office.




Posted: 3/13/2015 1:44:13 PM by Tom Connor | with 0 comments

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