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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 to 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" from a Marshal 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.

Breaking Down CPLR 5231: Top 5 Wage Garnishment Provisions

  1. Under N.Y. C.P.L.R. 5231, an income execution can be issued to a judgment debtor receiving income, with installments not exceeding 10% of that income (N.Y. C.P.L.R. 5231 (b)).
  2. No amount shall be withheld from the debtor's earnings for a week unless their disposable earnings exceed 30 times the federal or state minimum hourly wage, whichever is greater (N.Y. C.P.L.R. 5231 (b)(i)).
  3. The amount withheld from the debtor's earnings per week shall not exceed 25% of their disposable earnings or the amount exceeding 30 times the minimum hourly wage, whichever is less (N.Y. C.P.L.R. 5231 (b)(ii)).
  4. If the debtor's earnings are subject to alimony or support deductions, the withheld amount shall not exceed the amount that 25% of the disposable earnings for the week exceeds the alimony/support deductions (N.Y. C.P.L.R. 5231 (b)(iii)).
  5. The terms "earnings" and "disposable earnings" are defined as compensation for personal services and the part of earnings remaining after legally required deductions, respectively (N.Y. C.P.L.R. 5231(c)).

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Notice Must Be Provided to You First (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.

Income Execution Notice Law

New York Caselaw Mandating Notice Provided to the Debtor First

  • The initial service of income execution has shifted from targeting the provider of the money to the judgment debtor, thereby offering them a chance to fulfill the payments. This change is noted as a "new preliminary condition" in Oystermen's Bank & Trust Co. v. Manning, 298 N.Y.S.2d 355 (Sup 1969).
  • Serving the judgment debtor with this notice is a mandatory step before any levy against the employer can be made, as outlined in Kaplan v. Supak & Sons Mfg. Co., 260 N.Y.S.2d 374 (N.Y. City Civ. Ct. 1965).
  • This rule is applicable even when the judgment debtor resides outside New York, as long as their employer operates within the jurisdiction of New York. This jurisdictional nuance is highlighted in both Oystermen's Bank & Trust Co. v. Manning, 59 298 N.Y.S.2d 355 (Sup 1969) and Kaplan v. Supak & Sons Mfg. Co., 260 N.Y.S.2d 374 (N.Y. City Civ. Ct. 1965).
  • For instance, in the case Oystermen's Bank & Trust Co. v. Manning, a creditor aimed to implement an income execution against a debtor's employer located in New York. Despite the debtor now residing in California, they needed to be informed and provided an opportunity to make installment payments before the income execution could be initiated.

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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 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, which 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 payment made for personal services, including pension or retirement plan payments.
  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 Langel Firm-Intake Form

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 returns to that 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 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 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.

Some Debt Types Permit Wage Garnishment Without a Judgment

Creditors can garnish your wages for specific debts without needing a court judgment. These debts include:

  • outstanding income taxes,
  • court-mandated child support and any back payments, and
  • defaulted student loans.

However, for many other debts, such as unpaid credit card bills or medical fees, creditors must first take legal action against you, win the case, and secure a court judgment confirming you owe them money before they're allowed to garnish your wages.

Here is a list of New York City’s Marshals who enforce wage garnishments:

If you need help, complete this intake form.