SELF-HELP GUIDE TO GARNISHMENT AND INSTALLMENT PAYMENTS


If a creditor has taken you to court and obtained a money judgment against you, the creditor can enforce the judgment and collect the money owed by a number of ways. A creditor can attach your personal property and sell it at an auction, or a creditor can attach a portion of your wages from your job. This is termed a "garnishment" of your wages. When your wages are garnished by the creditor, your employer deducts the garnished amount from your pay and sends it to the creditor to pay the debt. Certain other types of income, such as social security, worker's compensation, are exempt from garnishment.

There are several other terms that are used in garnishment proceedings that you should be familiar with. The "plaintiff" is the creditor who sued you and obtained the money judgment. The "garnishee defendant" is your employer who is being ordered by the court to pay a portion of the wages you have earned to the creditor. You are the "principal defendant".

Once a creditor has obtained a judgment against you, the creditor can start the garnishment proceeding. The creditor does this by filing an Affidavit and Writ of Garnishment with the court clerk. The court clerk then sends the Affidavit and Writ of Garnishment garnishee to the defendant (your employer). Your employer then has seven (7) days to complete the Garnishee Disclosure and file a copy with the court and send a copy to you. The Garnishee Disclosure tells the court whether or not the employer is paying your wages. If the employer is paying you wages, the employer must complete the Garnishee Calculations Sheet for Earnings based on your current wages. The Garnishee Calculation Sheet for Earnings shows the amount to be withheld from your wages and must also sent to you by your employer. Once your employer files the Garnishee Disclosure and the Garnishee Calculation sheet for Earnings with the court, the creditor will ask the court to order your employer, the garnishee defendant, to deduct the amount from your pay each pay period and pay that amount to the creditor until the judgment is paid off.

To determine how much of your wages can be garnished, download, print, and fill out the Garnishee Calculation Sheet for Earnings link provided. Normally, $154.50 per week of your net earnings cannot be garnished. From your last pay stub write your gross weekly income from your job on Line l. Write your deductions for taxes, Medicare and social security and total them on Line 2.By subtracting Line 2 from Line 1, you will have your disposable earnings on Line 3.

Multiply Line 3 by 0.25 (25%) to determine the amount available for garnishment under Test l and write this amount on Line 4. Next, from the chart at the bottom of the page, write the amount which corresponds to your pay period on Line 5. For example, if you are paid every two (2) weeks, write $309.00 on Line 5a. Subtract the amount on Line 5a from Line 3 and write that amount on Line 5b. Compare Line 5b to Line 4. Write the smaller of the two on Line 6. Write any ordered deductions from your wages as shown on your pay stub on Line 7. Ordered
deductions include, Chapter l3 bankruptcy payments, past due federal or state taxes, child support and any other garnishments. Total Line 7, subtract the total from Line 6 and write the amount on Line 8. Compare Line 8 with the amount of the judgment the creditor received against you. The smaller of the two amounts is the amount that can be withheld from your wages.

After determining how much of your wages an be garnished, you may want to file a Motion for Installment Payments with the court. If nothing can be garnished, you need not file the Motion for Installment Payments. Only those people that have wages from employement should file the petition for installment Payments. To file for installment payments, you should download and print the Motion for Installment Payments, and complete the Order Regarding Installment Payments. For interactive versions of these forms which you can complete online with step by step instructions you can access the Michiganlegalaid.org automated court forms.

  1. Write in the name and address of the plaintiff/creditor and the creditor's attorney in the spaces shown. Write in your name and address in the box labeled "Principal Defendant". Write in the case number at the top of the form. The case number can be found on the judgment or other papers sent to you by the creditor, or by calling the court clerk.
  2. Write the amount of the judgment the creditor received against you and the date the judgment was entered in the spaces provided. If you do not know these amounts, the court clerk can assist you.
  3. Fill-in the information concerning your employment. Under "Outstanding judgments and obligations" write "see reverse side". On the reserve side, in the box provided, list all of your debts, obligations, and monthly payments. These should include rent/mortgage, utilities, child support, child care, food, car, gas, and any other payments you may make. It is very important to fill-out the financial information as completely as possible to the best of your ability.
  4. Determine an amount that you are able to pay, for example, $25 per month. Write the amount and payment period in the spaces provided. Do not list an amount that you are unable to pay.
  5. If a Writ of Garnishment has been previously issued, fill-in Line 3.
  6. Fill-in the case number, the creditor/plaintiff, the creditor's attorney, and your name and address as in the Petition for Installment Payments, on the Order Regarding Installment Payments. Also complete the date the judgment was entered and the judgment amount. Check the box only if a Writ of Garnishment has been issued. Do not complete the rest of the form.
  7. Take the Motion for Installment Payments and the Order Regarding Installment Payments to the court clerk's office. Sign the Petition for Installment Payments in the presence of the court clerk. The Petition for Installment Payments must be notarized and the court clerk will do this for no charge. Only sign the petition for installment payments in the presence of the court clerk or a notary.
  8. The court clerk will assign a hearing date and will fill-in the date and time you are to appear. The court clerk will also send a copy of the Motion for Installment Payments to the creditor/plaintiff or the creditor's attorney.
  9. Appear in court on the date and time the court clerk assigned to you. Bring the completed Order Regarding Installment Payments with you. If you do not appear, the garnishment will issue and the amount will be deducted from your wages.
  10. In court, ask the judge for the amount you determined you could pay in installments. Do not tell the judge an amount you cannot or will be unable to pay. If you miss a payment, the creditor can then have the order set aside. If the judge agrees with you, have him complete the order Regarding Installment Payments.

Once you file the Motion for Installment Payments with the court clerk, the creditor cannot garnish your wages as long as you make the payments. If you fail to make the payments or make less than the ordered amount, the creditor can have the installment agreement set aside. Installment payments will only stop the garnishment of your wages from employment.

The creditor can still garnish anything else including bank accounts and tax refunds.

To locate free or low cost legal assistance:

  • Visit the Michiganlegalaid.org home page and search for local assistance by entering your zip code in the box marked “Find a lawyer, organization or related service to help you with your problem.” or

  • Look under "attorneys" in the yellow pages to find your local legal aid office, or

  • Contact the Michigan State Bar Lawyer Referral Service at (800) 968- 0738. 

  • Persons age 60 or older, regardless of their income, may be able to receive free advice from the Legal Hotline for Michigan Seniors by calling (800) 347-5297.

This article is provided courtesy of Legal Aid of Central Michigan