23/04: Garnishment

Michigan codifies the statutory law on garnishment and attachment at MCL 600.4001 et seq. and the procedural rules for handling a garnishment at MCR 3.101. Garnishment allows a creditor who has procured a judgment to take or attach property of the debtor that is held by someone other than the debtor (the garnishee) as payment. The debtors wages and bank accounts are commonly garnished.

After the time for appeal and any motion for a new trial, for rehearing or reconsideration, or for other relief from judgment has lapsed, effectuating the judgment by execution or garnishment procedures may begin. Execution orders the sheriff to take the debtor's property or money from his hands, while garnishment takes his property or money held by someone else. MCL 600.6001 to 600.6098 et seq.; MCR 3.101 - 3.110 (Special Proceedings).

A judgment creditor wanting to collect on a judgment must file a verified statement, which serves as the complaint against the garnishee defendant. The party holding the debtor's property is referred to as the garnishee defendant and their disclosure serves as the answer.

MCR 2.114(A) and MCL 3.101(D) apply to the verified statement in which the affiant plaintiff asserts in the verified statement that a judgment entered against the defendant remains unsatisfied; the amount of the judgment and the unpaid balance; and that he knows or has good reason to believe that the person named (the garnishee defendant) has control of property that belongs to the defendant, is indebted to the defendant, or is obligated to make periodic payments to the defendant. The court cannot require supporting documentation in addition to the verified statement. The writ must be issued based upon the verified statement. Credit Acceptance Corp v 46th Dist Court, 273 Mich App 594, 733 NW2d 65 (2007), aff’d, 481 Mich 883, 748 NW2d 883 (2008).

Approved forms for garnishment proceedings can be found at the Michigan State Court Administrative Office website. In addition to the verified statement, a writ of garnishment must be completed with enough information to permit the garnishee to identify the defendant. Once the writ is issued, the plaintiff has 91 days to serve it on the garnishee in compliance with MCR 2.105. Once served, the order is effective to restrain the transfer of the amount of money or the property, which is subject to a garnishment lien. Unless the garnishee is notified of objections, the money disclosed is paid. If there is an objection a hearing is held.

Up to 25 percent of disposable earnings per week may be garnisheed unless the debtor earns minimum wage or near minimum wage. 15 USC 1673; MCR 3.101(G)(1)(f). Garnishment of periodic payments will last for 91 days (from the date the writ is issued) or until the judgment, plus interest and costs, is satisfied. MCL 600.4012(1)(a),(b); MCR 3.101(B)(1)(a). The 91 days runs from the date the writ is issued, not from the date it is served. MCR 3.101(B)(1)(a)(ii).

Social security, unemployment compensation, and worker compensation benefits are exempt in whole or in part from garnishment. MCL 400.63 allows the Family Independence Agency to deduct up to 10 percent of a cash grant to give to a landlord judgment creditor for a tenant’s breach of lease. Generally pension and annuity plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC 1001 et seq., are not subject to garnishment. There is an exception where a divorce or child support order or there is child abuse. See the Child Abuse Accountability Act, 5 USC 8345(j)(1); 5 CFR 838.1101.

A defendant can file a petition for installment payments to stop withholding periodic garnishments. If the writ of garnishment has not expired at that point, withholding resumes until the writ’s expiration. MCR 3.101(N)(1), (2). An order for installment payments does not suspend the effectiveness of a writ of garnishment of nonperiodic payments or of an income tax refund or credit. MCR 3.101(N)(1).

The creditor may procure a writ of execution against personal property. If the judgment remains unsatisfied, then a writ of execution against real property of the debtor can be issued.



Comments

Amy wrote:

I made less than $8000.00 this year and recieved a notice that wants to take my tax return. I have two children to support and count on the heat credit. Is there a way to stop this until I am working full time and able to pay the debt?
09/11 17:07:10

refadmin wrote:

Dear Ms. Hamelin:

You need to prepare and file a document entitled Satisfaction of Judgment. A Stipulated Order to this effect will suffice. This can be prepared by you, an attorney on your behalf or by the opposition. If you would like me to perform this service, please so inquire.
03/11 23:54:06

Jean Hamelin wrote:

What do I do if my wages have been garnished and the debt had been fulfilled, but a "satisfaction judgment" was never filed? I had my wages garnished in 2005 and the debt was repaid, but I just found out that the judgment was never "satisfied". The attorney who represented the plaintiff is with another firm. I contacted his old firm, and have secured a letter stating the debt has been paid, but the form has still not been filed.
30/10 22:02:29

refadmin wrote:

Dear Jan:

You need to work out an arrangement with the attorney or request a hearing. Contact the office of the judge assigned to the case.

If you do not comply with the installment order, the creditor plaintiff may file a motion to set aside the order. The court will set aside the order unless a hearing is requested within 14 days. If you move for an order for installment payments within 91 days after a previous installment order has been set aside, the court may assess costs against the you as a condition of entry of the new order.
21/07 15:05:44

Jan wrote:

I am wondering if I have an installment payment agreement of $150 with a law firm for an outstanding medical bill and I lapse one payment and pay one late if they can garnish all of my accounts? Both my savings and checking have been held and I have no means in which to secure money to even pay this monthly instalment or any other bills or the NSF fees that are piling up this week. Can I file a MC 49 form is this the right form, or should I try to work it out with the firm representing the hospital? I have sent them a certified letter and called them once a day for 4 days with no reply received. The non-periodic garnishment went on my accounts on June 18. I researched some of the Michigan garnishment laws and I do see that they cannot garnish the first $500 in a savings account unless I read it incorrectly or am not clearly understanding the MCL. They are holding $2100, all of my monies - do I have any options?

Thank you for any advice you may be able to offer - I cannot pay to secure an attorney as all my funds are being held.
23/06 17:27:17

Your comment

Comments must be approved before being published. Thank you!