Receive a Notice of Garnishment? Here's a Summary of the Law

You have likely reached this blog after having received a Notice of Garnishment from a Marshal (i.e., Marshal Bienstock, Daly, Moses, or Biegel) or Sheriff threatening a wage garnishment. This post summarizes New York law only.

The below material can serve as your introduction of the law that governs that garnishment. It is a summary of the complex language of New York CPLR § 5231 called an "Income Execution" otherwise known as a wage garnishment. You probably received a "Notice of Garnishment" by a Marshal or or Sheriff along with an official looking document with the phrase "Income Execution" located on the upper right.

Your creditor's utilization of an income execution—through a Marshal or Sheriff—is a means to extract a percentage of your wages directly from your employer. The process and requirements are anything but simple, especially when it comes to calculating the maximum amount of money that can be claimed at any given time.

The Notice to you (before it's served on your employer)

When a creditor has been granted court authority for an income execution, the creditor prepares a notice, which specifies:

  • The name and address of the person or company from whom the debtor is receiving or will receive income;
  • The amount and frequency of the payments;
  • The installment amount the creditor is seeking from each payment; and
  • A notice to the debtor that unless he or she makes these installment payments directly, the notice will be served on the party who owes them income and they'll be compelled to make the payments instead.

The notice is generally delivered to a sheriff or marshal who serves it on the debtor (in the ways allowed for a summons or by certified mail), in the county where the debtor lives or works, and the debtor has twenty (20) days to comply.

If the debtor fails to make those voluntary payments, or simply can't be found, then twenty (20) days later, the creditor can have the sheriff or marshal issue the notice to the source of the income (your employer). This is usually done through personal service or certified mail, and there is a specific process for service on state government employers. If the debtor has made some direct payments before defaulting, the amount they have paid and the amount remaining due need to be written onto the notice before it is served on the income source.

How Much Money Can the Creditor Demand From a Single Paycheck?

It's important to note that an income execution can't seek all, or even most, of the income being paid to the debtor. The formula for determining how much can be demanded is extremely complex. There is mandatory specific language in the statute explaining this and this language must be included in the notice when it is served on the debtor. Here are the basic requirements:

  1. The income can be wages, salary, commissions, bonuses or any other type of payment made for personal services, including payments from a pension or retirement plan.
  2. The debtor's income for the time period at issue must be at least thirty (30) times the federal minimum wage, or the state or local minimum wage if it is higher than the federal.
  3. The amount of the installment payment can't exceed ten percent (10%) of the debtor's gross (before tax) income for that period; and
  4. The amount of the installment payment to be deducted from the debtor's wages must be the lesser of:
  5. Twenty five percent (25%) of the debtor's disposable (after tax) income from that period; or
  6. The amount remaining after taking the debtor's disposable income from that period and deducting an amount equal to thirty (30) times the applicable minimum wage.
  7. If the debtor is under a court order to pay alimony or child support, the amount of alimony or support must be deducted first before making the determination explained in the paragraph above.

The usual exemptions from satisfaction of a judgment, discussed in other blog posts in this series, still apply.

The Process After Notice Is Served on the Income Source (i.e. employer)

When an income execution has been served on a source of income, the employer must begin withholding the specified amount from their payments to the debtor and turn it over to the sheriff or marshal to be paid to the creditor. If this doesn't happen, the creditor can begin a court proceeding against the income source to recover the accrued installments.

If the debtor quits or is fired from the job, the income execution is voided, but can be reinstated if he or she comes back to that same job within ninety (90) days. The sheriff or marshal involved with the income execution needs to make any accrued payments and account for their efforts and their expenses to the creditor and the court every ninety (90) days.

If there are competing income executions, meaning two or more creditors are seeking to execute on the same income for different debts, then whichever is filed first takes priority. The other may be returned as unsatisfied if there is not enough money left from the debtor's available income to make the payment. However, that creditor could continue attempting to execute on the income from future payments until funds are available.

Although this is a fairly long blog post, we have stated the requirements of this very complex statute in the simplest possible terms here. The full statute is dense and complex. If you have been served with a notice of income execution it's a good idea to consult with an attorney who can help determine whether the notice complies with the law and explain your rights and options.

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