Garnishment: Know Thy Debtor

Everyone knows that economic times are hard right now. Collection lawsuits are on the rise and, as a result, courts are issuing more judgments. A judgment may be just a piece of paper but it transforms a “Plaintiff” into a “judgment creditor” with unique powers to try to collect the debt he or she is owed. By way of example, garnishment is a powerful collection tool that can be used to reach both personal property and intangible personal property of and debts due to the judgment debtor. In a garnishment proceeding the creditor steps into the shoes of the debtor and collect proceeds from a third person, often an employer or bank, who is referred to as the “garnishee.”  In order to garnish a debtor’s bank account or wages, you, quite obviously, must know your debtor. Specifically, you should know where he or she banks and works.

Fla. Stat. § 77.01 provides that a garnishee can generally be any person who is holding money due or property belonging to a debtor.  The most common garnishees are typically banks and employers of debtors.  A debtor’s wages can be garnished through a continuing writ of garnishment and a debtor’s bank account or safe-deposit boxes may be garnished from its bank.  Florida statutes do apply limitations on who can be a garnishee. There are, of course, exemptions on what types of debtors are subject to garnishment as well as the amount that can be garnished. For example, a creditor cannot garnish wages of a debtor who is head of household in Florida. A debtor can qualify for the “Head of Household” exemption if (a) the debtor provides more than one?half of the support for a child or other dependent and has net earnings of $500 or less per week, or (b) provides more than one?half of the support for a child or other dependent, has net earnings of more than $500 per week, but has not agreed in writing to have his or her wages garnished. Other exemptions to garnishment include welfare and social security benefits. Because there are exemptions to what may be garnished, it is important to ascertain to the extent possible the exact nature of the debtor’s interest in any money or property before beginning a garnishment proceeding in order to avoid unnecessary costs associated with garnishment when it is unavailable.

The process of garnishment is statutory in nature and accordingly has strict deadlines that must be followed regarding notice and filing. Courts can dissolve writs of garnishment if noticing provisions are not correctly followed.  Nonetheless, garnishment represents a powerful and cost-effective collection tool when and if you know your debtor.

Source reference: Creditors’ and Debtors’ Practice in Florida (Third Edition 2007)

Practice area: Creditors’ rights