Garnishment

Judgment Creditor (or Creditor) – any person/entity who has a money judgment against a debtor in court

Judgment Debtor (or Debtor) – any person/entity who has had a judgment entered against them in court

Judgment – an order entered by a court when someone sues another person/entity and wins

Garnishee (or Third-Party Garnishee) – a person/entity other than the judgment debtor who is in possession of money or property of the judgment debtor and who is subject to the garnishment ordered by a court

Wage Garnishment – taking part of a debtor’s pay/salary to pay a creditor

A garnishment is a court order that a creditor applies in writing to the court to get payment for an unpaid judgment against a debtor.

A garnishment is obtained only AFTER a creditor has sued the debtor to enforce a debt or monetary obligation, or for another cause of action, and has a court ordered judgment.

It is usually between the creditor and the garnishee (like an employer or a bank), who is holding money that belongs to the debtor (like salary or money in a bank account.)

After obtaining a court judgment, a creditor applies in writing to the court asking the court to issue a Writ of Garnishment to the garnishee requiring the garnishee turn over the debtor’s money or property that it has in its possession.

The creditor states in the application to the court that it is owed money by the debtor for a judgment, which the debtor is not paying voluntarily, and that the garnishee has money or property that belongs to the debtor which can be used to pay the debt.

The court will serve papers on the garnishee which requires the garnishee to verify that it has/holds the debtor’s money (i.e. that it is the debtor’s employer, bank, etc.). Once this is verified, the court will order the garnishee to pay the money to the creditor.

Wage garnishments are made by a court order or government agency order. The order is sent to your employer. The order requires that your employer withhold a certain amount of money from your paycheck and then send this money directly to your creditor.

Most creditors will have to go to court to get a court order. However, a court order usually is not required for:
unpaid state and federal income taxes
court ordered child support
child support arrears, and
defaulted student loan

Voluntary wage assignments are different. They are private contract transactions and may not be subject to wage garnishment laws. However, there is a federal rule that prohibits most voluntary wage assignments. If you agreed to a voluntary wage assignment, you may want to speak with an attorney. Click here for help finding a lawyer.

Only disposable earnings can be garnished. The term “earnings” means compensation paid or payable for personal services, such as wages, salary, commission, bonus, and includes periodic payments under a pension or retirement program. An employee’s disposable earnings means that part of the earnings left over after the deduction of any amount required by law to be withheld. Examples of deductions required by law include: federal income tax withholding, federal social security tax, and state and local tax withholding. However, deductions such as those for union dues, health and life insurance premiums, assignment of wages, and savings bonds, are not considered required by law to be withheld and may be included in calculating the employee’s disposable earnings.

Yes. Wyoming’s wage garnishment law limits the amount of an employee’s disposable earnings that may be subject to garnishment in any one week. The largest amount of total disposable earnings subject to garnishment in any work week may not be more than:
25% of the disposable earnings for the workweek; OR
The amount by which defendant’s aggregate disposable earnings computed for the workweek exceeds thirty (30) times the federal minimum hourly wage, whichever is less

Put another way, the amount which cannot be garnished is the greater of 75% of disposable earnings, or a calculation based on thirty (30) times the federal minimum hourly wage for one workweek (see examples below).

NOTE: Wyoming law protects 100% of the earnings or wages of National Guard members (earned while performing military duties), inmates or parolees in an adult community corrections program, correctional facility, or on work release.

Examples
Federal minimum wage is $7.25 per hour in Wyoming.

The exempt amount (which cannot be garnished) is the greater of (by pay period):
Weekly – $217.50 (30 x $7.25) or 75% of Disposable Earnings
Bi-weekly – $435.00 (60 x $7.25) or 75% of Disposable Earnings
Semi-monthly – $471.25 (65 x $7.25) or 75% of Disposable Earnings
Monthly – $942.50 (130 x $7.64) or 75% of Disposable Earnings

If the minimum wage is increased, the minimum amount of your wages that is exempt from garnishment will also increase. The exempt amount should be based on either the State or Federal minimum wage, whichever is higher.

There are special limits applicable to court orders for child support and alimony (spousal support or maintenance). A limit of 50% of disposable earnings is subject to garnishment for child support or alimony for a person supporting another spouse or child and 60% for a person who is not supporting another spouse or child — plus an additional 5% in each situation if there are outstanding arrearages over twelve (12) weeks old.

The limits generally do not apply to: Bankruptcy court orders or debts due for state or federal taxes.

Wyoming law only allows one garnishment at a time. This means that your creditors may have to wait in line to collect from your wages. Priority is given for garnishments for child support and federal orders from a bankruptcy court or delinquent taxes or student loans.

No, Wyoming law prohibits employers from firing a person because of any garnishment request. The law prohibits employers from “discharging an employee for the reason that a creditor has subjected or attempted to subject unpaid earnings of the employee to any garnishment or like proceeding directed to the employer for the purpose of paying any judgment.” W.S. 1-15-509.

If you are wrongfully discharged by your employer because of a creditor’s garnishment request, then you may file a case in civil court to enforce the law and recover your wages and/or ask to be re-instated to your job. W.S. 1-15-509(b). You have a limited amount of time to file this type of action (120 days) and should seek the advice of a lawyer as soon as possible. Click here for help finding a lawyer.

A creditor or the debt collector it hires may get a court order to try to take money from your bank account to pay the debt. The court order is called a garnishment. Judgment creditors (creditors and debt collectors) routinely go after funds in bank accounts. A judgment creditor can attempt to garnish the money in a bank account even if the money originally was exempt (see below). In other words, as soon as you put money into a bank account, a judgment creditor can attempt to garnish the account if the judgment debtor’s name is on the account. This includes joint accounts. If you know there is a judgment against you, you may want to close any account in your name. By the time you receive notice of a garnishment, it will probably be too late.

When a bank account is garnished the judgment debtor gets a Writ from the Court and serves the bank and then serves the debtor. This means you may not find out until the funds are already frozen. The funds in the account are frozen up to the amount of the judgment.

Wyoming law says you have ten (10) days to object to the garnishment of the bank account after service of the Writ. This is when you must file your Claim of Exemption. While the account is frozen any outstanding checks will be returned, likely resulting in insufficient fund (NSF) charges. Your bank will also probably charge a fee for the garnishment. The Claim of Exemption form should be included with the notice of garnishment.

If you do not file an objection and Claim of Exemption to the garnishment within ten days, then the Court will release the funds to the judgment creditor. If you do file a Claim of Exemption with the Court within ten days, the Court will set a hearing on the objection and your exemption claims. The hearing will be set within five days after you file. At the hearing, if the Court finds that the funds are exempt from garnishment (see below), the Court will order the money released to you. If the Court finds that the funds are not exempt, the Court will order the money released to the judgment creditor.

Keep in mind that even if the Court finds that the funds are exempt from garnishment and releases the money to you, you will still be liable for any NSF fees, garnishment fees and other costs associated with the garnishment. The costs of a garnishment can be very large.

Know that if you have a joint account, your creditors DO NOT have to notify the other account holder of the garnishment and all funds in the account can be frozen up to the amount of the judgment.

A new federal law effective May 1, 2011, protects federal benefits electronically deposited into bank accounts. Federal money that is protected includes Social Security, Supplemental Security Income (SSI) and Veterans Administration benefits, among other federal payments. Click here for more information about which federal benefits are protected from garnishment. However, there are some situations where these funds are not protected and may be garnished. For example, some of these federal benefits may be used to pay delinquent federal taxes or student loans. Others, such as Social Security benefits, may be deducted before you receive them to pay child support or alimony.

When banks or credit unions receive an order to freeze an account, they must review the accounts owned by the individual to determine whether any protected federal benefits were electronically deposited during the preceding two months. If there have been federal benefits deposited, banks must calculate the “protected amount.” The protected amount is the lesser of the sum of all exempt benefits electronically deposited into the debtor’s account during the previous two months or the current balance.

For example, Jane Smith receives $674.00 per month in SSI and it is deposited electronically in her checking account on the first of each month. On October 10 her bank receives an order to freeze $850.00 because of a court judgment. The bank must look at her account records and determine if she has received federal benefits in the last two months. Their review will show $674 received on October 1 and $674 received on September 1 for a total of $1348. On October 10, she has $650.00 in her account. The “protected amount” is the $650.00 (the lesser of the $1348 and the $650). This means that the bank will not freeze her funds.

Important! If the funds have been transferred to another account (not the account where the funds are automatically deposited), it will not be protected from being frozen even though it may still be exempt. You will have to file an objection and claim of exemption to get those funds released.

In our example, if Jane had transferred her SSI money from the checking account where it was electronically deposited to a savings account, it would not be protected from being frozen. However, if she acts quickly, she can still file a Claim of Exemption with the court and show that it is SSI. The money will be released but she will have to pay the bank’s fee to freeze the account.

See the Wyoming Exemptions below for the list of exemptions under Wyoming law. In addition to the federal benefits described above, child support payments, most retirement funds and accounts, and some medical savings accounts (except for payment of certain medical debt), may be exempt under Wyoming law. Unlike the federal benefits above, these funds are not automatically protected and you will have to file an objection and claim your exemption with the court. If you think you may have exempt funds, seek the advice of an attorney as soon as possible because you only have a limited time to claim your exemption (10 days). Click here for help finding a lawyer.

By the time you a receive a notice of garnishment, the funds in your bank account have already been frozen. If your bank account contains exempt funds, you should seek the assistance of an attorney at once. Click here for help finding a lawyer. You also should follow the instructions in any garnishment notice you receive. It is very important that you meet any deadline in the notice for telling the court that money in your account is exempt from garnishment. Usually, you have only 10 DAYS to file your claim.

Keep in mind that if you wrote checks or authorized electronic payments that have not cleared yet, they may be returned unpaid and you will probably be charged insufficient fund (NSF) fees. You will have to pay these fees even if the Court decides that your money is exempt. Therefore, you should make arrangements to prevent outstanding checks or payments from bouncing and prevent the imposition of NSF fees. You might want to contact the people you wrote checks to, for example, and explain that you are working with your bank to resolve the problem.