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Posted by: Erik Clark
Last updated Oct. 30, 2017.
Although many people believe that missing a payment or two on a debt can result in a quick garnishment of their wages, this is not the case. Having one’s wages garnished in New York State is the end result of a process that can last for several months.
With credit cards, the lawsuit is usually not commenced until a few months go by without payment to the creditor. First, the bank will start calling the debtor to make arrangements for payment. When this is not successful, the debt can be farmed out to a collection agency that will begin making such calls.
At some point, the debt is then sent to a lawyer to commence suit.
Your Creditor Will Have to Sue Before They Can Garnish
The garnishment can be the result of a failure to pay a credit card bill, the repossession of a car, or anything that results in a debt being due and not being paid. Once a debt is not paid it is in default, and the creditor has the right to bring a lawsuit in court to try to collect the debt. Only after the lawsuit results in a judgment can a garnishment begin.
The main trial court in New York State is called the Supreme Court. However, for debts under $25,000, suit is usually brought in a lower court. In the five boroughs of New York City, this would be the New York City Civil Court. In Nassau and Suffolk counties, the lower court is called the District Court. In other counties, the suit may be in the County Court, or in a City Court.
Whichever court the suit is commenced in, the first notice the debtor will have is when they receive a Summons, which will give details of who is suing and what amount the suit is for. The summons is accompanied by a complaint or a simple notice, which gives further details as to the amount due. The debtor, of course, has the right to go to the court to put in an answer and contest the suit, but if the debt is truly owed, eventually the bank will get a judgment for the amount due.
It takes at least a month before the judgment is granted if the debtor does nothing, and thus, figuring on a few months before suit is commenced after the debtor defaults in making payments, it can be four or five months before a judgment is rendered.
Once the Bank Has a Judgment, Garnishment Can Proceed
Once the bank has a judgment, it can start the garnishment process. In New York, the garnishment process has two steps, called stages. In the first stage, the bank’s attorneys send garnishment papers to an enforcement officer, who then sends a notice to the debtor. In the five boroughs of New York, this enforcement officer is called a marshal. In the remainder of the state, the enforcement officer is the county’s sheriff. New York City does have a sheriff who can also be the enforcement officer, but he is usually only involved for debts above $25,000.
The enforcement officer sends a notice to the debtor (not the employer) telling the debtor of the judgment and that a garnishment will be sent to the employer after 20 days if arrangements are not made to pay the debt. In New York when the garnishment finally gets to the employer, 10% of a debtor’s gross wages are deducted and sent to the enforcement officer. Thus, in accordance with the notice from the enforcement officer to the debtor, the debtor can pay that 10% directly to the marshal or sheriff and the employer will not be told of the garnishment or asked to execute on the debtor’s wages. The debtor would send the 10% directly to the enforcement officer, along with copies of paychecks, until the debt is paid in full.
If the debtor does not respond to the enforcement officer, after the 20 days are up, the marshal or sheriff notifies the bank’s attorneys that payment is not being made, and the attorneys then send a second set of papers to the enforcement officer. This is called the second stage, and this time, the marshal or sheriff sends garnishment papers directly to the employer. Once the judgment is secured from the court, it therefore takes about a month before papers are sent directly to the employer.
The amount that is eventually paid includes interest at the rate of 9% plus additional fees for the enforcement officer. Thus, the final amount payed can be a lot more than the original debt.
How often can my wages be garnished in New York?
Sometimes a debtor owes money to more than one creditor, and may have more than one judgment entered against them. However, there can be only one garnishment at a time, so if another comes in while one is ongoing, the second (or third) will wait until the previous garnishment is paid in full. Meanwhile, interest is accruing during the wait.
At any point in this lengthy process, if the debtor were to file a petition in bankruptcy, all garnishments, lawsuits, or any other attempt to collect on any debt would stop immediately.
While garnishment is a serious matter, one should understand the steps involved in the process. Many times creditors or collection agencies trying to collect a debt before suit is commenced will confuse a debtor into thinking that if they do not pay right away, a garnishment will begin almost immediately. This is not true, as the lengthy process outlined has to be followed before wages can be garnished.
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Erik Clark is one of the leading bankruptcy attorneys in Southern California who has had the privilege of representing thousands of clients in chapter 7 and chapter 13 bankruptcy cases in the Los Angeles area. Erik has served as the past President of the National Consumer Bankruptcy Litigation Center (NCBLC) and the American Consumer Bankruptcy College (ACBC). His firm, Borowitz & Clark, is committed to using bankruptcy law as a tool for social justice and was one of the first consumer law firms to join the Law Firm Antiracism Alliance.