Wage garnishment is a means of extracting payment from someone who owes a debt but is unwilling to pay it. Garnishment is regulated at the state level, and state laws governing the practice can differ quite a bit. Here is the question if you are a creditor: how do you verify a debtor’s employment and wages prior to asking for a writ of garnishment?
The starting point is obtaining a judgment against the debtor. Garnishment is not an option without a judgment, meaning standard debt collection practices do not include garnishment. Obtaining a court judgment means filing a civil lawsuit against the debtor and then winning the case.
Judgment Collectors, a Utah collection agency specializing in and collecting judgments in eleven states, says that wage and bank account garnishment are pretty common in the judgment collection game. Although it can take quite a while to settle a sizable debt through garnishment, it is an effective collection method as long as the debtor remains employed.
Determining if Garnishment Is Worthwhile
A creditor would want to verify debtor employment and wages before considering garnishment. Why? To ensure that going through the trouble of obtaining and executing a writ of garnishment is worth the time and trouble. It is all due to the fact that garnishment doesn’t allow creditors to take as much money as they want.
Most states only allow a certain portion of a debtor’s disposable income to be seized through garnishment. Let us randomly pick a number of 25%. Let’s say that for every $100 a debtor earns, just $25 is disposable income. A creditor can only garnish 25% of that amount, or $6.25. So even if the debtor makes $1,000 per week, the garnished amount is a mere $62.50.
Paying off a sizable debt could take some time at that amount. Even so, Judgment Collectors say that garnishment might be a creditor’s best option. When it is, the debtor may not have any other valuable assets to think about.
Verifying Employment and Wages
The easiest way to verify a judgment debtor’s employment and wages is through either interrogatories or a debtor’s exam. The two legal tools are similar.
Interrogatories are more or less written questions furnished to the debtor through the creditor’s attorney. Creditors can only ask questions pertaining to employment, wages, and assets. Debtors are expected to answer the questions truthfully and completely.
Some states dispense with interrogatories in favor of a debtor’s exam. The debtor’s exam is a court hearing at which both creditor and debtor appear. The creditor is allowed to ask questions about the debtor’s finances; the debtor is expected to answer truthfully.
Above and beyond interrogatories and the debtor’s exam, creditors have additional options for verification:
- Bank subpoenas
- Credit checks
- Public records searches
- Employer contacts
- Social media posts
- General internet searches
- Financial record subpoenas
Creditors typically have enough resources at their disposal to at least verify whether a debtor is employed. If they can verify that much, discovering how much the debtor makes is not a problem.
If Wages Are Insufficient
What is a creditor to do if employment is verified but the debtor’s wages are insufficient to make a dent in his debt? The creditor can look at other means of collection including bank account garnishment, a monthly payment plan, a settlement, placing judgment liens on debtor property, or even seeking writs of execution.
Any plans to collect an outstanding judgment by way of wage garnishment must be tempered by the reality of the debtor’s financial situation. This is why creditors seek to verify employment and wages prior to pursuing garnishment.
