Federal Wage Garnishment Law 15 Usc 1671 Creditor Debtor Judgment Enforcement Collection

Adkisson's CREDITOR DEBTOR LAW An Overview of Creditor-Debtor Law and Judgment Enforcement Techniques

CAUTION STATE LAW VARIANCES

Judgment enforcement law is notoriously non-uniform between the various states.

 

Federal Wage Garnishment Law

15 USC § 1671

15 U.S. Code § 1671 - Congressional findings and declaration of purpose

 

(a) Disadvantages of garnishment. The Congress finds:

 

(1) The unrestricted garnishment of compensation due for personal services encourages the making of predatory extensions of credit. Such extensions of credit divert money into excessive credit payments and thereby hinder the production and flow of goods in interstate commerce.

 

(2) The application of garnishment as a creditors’ remedy frequently results in loss of employment by the debtor, and the resulting disruption of employment, production, and consumption constitutes a substantial burden on interstate commerce.

 

(3) The great disparities among the laws of the several States relating to garnishment have, in effect, destroyed the uniformity of the bankruptcy laws and frustrated the purposes thereof in many areas of the country.

 

(b) Necessity for regulation. On the basis of the findings stated in subsection (a) of this section, the Congress determines that the provisions of this subchapter are necessary and proper for the purpose of carrying into execution the powers of the Congress to regulate commerce and to establish uniform bankruptcy laws.

 

15 U.S. Code § 1672 - Definitions

 

For the purposes of this subchapter:

 

(a) The term “earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program.

 

(b) The term “disposable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld.

 

(c) The term “garnishment” means any legal or equitable procedure through which the earnings of any individual are required to be withheld for payment of any debt.

 

15 U.S. Code § 1673 - Restriction on garnishment

 

(a) Maximum allowable garnishment. Except as provided in subsection (b) and in section 1675 of this title, the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed

 

(1) 25 per centum of his disposable earnings for that week, or

 

(2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of title 29 in effect at the time the earnings are payable, whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph (2).

 

(b) Exceptions

 

(1) The restrictions of subsection (a) do not apply in the case of

 

(A) any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review.

 

(B) any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11.

 

(C) any debt due for any State or Federal tax.

 

(2) The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed—

 

(A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individual’s disposable earnings for that week; and

 

(B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual’s disposable earnings for that week; except that, with respect to the disposable earnings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per centum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek.

 

(c) Execution or enforcement of garnishment order or process prohibited. No court of the United States or any State, and no State (or officer or agency thereof), may make, execute, or enforce any order or process in violation of this section.

 

15 U.S. Code § 1674 - Restriction on discharge from employment by reason of garnishment

 

(a) Termination of employment. No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.

 

(b) Penalties. Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both.

 

15 U.S. Code § 1675 - Exemption for State-regulated garnishments

 

The Secretary of Labor may by regulation exempt from the provisions of section 1673(a) and (b)(2) of this title garnishments issued under the laws of any State if he determines that the laws of that State provide restrictions on garnishment which are substantially similar to those provided in section 1673(a) and (b)(2) of this title.

 

15 U.S. Code § 1676 - Enforcement by Secretary of Labor

 

The Secretary of Labor, acting through the Wage and Hour Division of the Department of Labor, shall enforce the provisions of this subchapter.

 

15 U.S. Code § 1677 - Effect on State laws

 

This subchapter does not annul, alter, or affect, or exempt any person from complying with, the laws of any State

 

(1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or

 

(2) prohibiting the discharge of any employee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness.

 

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Interesting Court Opinions On The Federal Wage Garnishment Law

 

In re Foster, 556 B.R. 233 (Bk.E.D.Va., 2016).

 

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SITE PAGES

 

ABOUT JUDGMENTS - Overview of judgments as they relate to judgment enforcement.

 

Collecting Default Judgments - Special considerations for default judgments.

 

Form of Judgment for Collection - Getting the form of judgment right can make collection easier, and getting it wrong more difficult.

 

Judgments On Appeal - Is a judgment enforceable when it is being appealed? Maybe. Appeal bonds a/k/a supercedeas bonds also discussed.

 

 

JUDGMENT ENFORCEMENT DISCOVERY - It's difficult to collect against the debtor's assets unless you find them, and it can be difficult to find them.

 

Private Investigation - Non-judicial methods of investigating the debtor's assets and affairs, including database searches and the use of private investigators.

 

Written Discovery - Some states allow for written discovery to be propounded to a debtor, which is a good way to start accumulating information from the debtor, or at least what the debtor claims is his assets.

 

Debtor Examinations - The traditional way of obtaining information from a debtor, which is to haul them into court, sit them down at a table, and ask questions point-blank about assets and income.

 

Third-Party Examinations - Means of obtaining discovery from third-parties about the debtor's assets and affairs.

 

 

JUDGMENT ENFORCEMENT REMEDIES - The primary methods for taking assets and income away from the debtor.

 

Judgment Liens and Abstracts of Judgment - Ways of freezing assets so that they cannot be easily transferred away pending execution.

 

Writ of Execution - This document authorizes the Sheriff to make collections on behalf of the debtor, and some other stuff.

 

Writ of Garnishment - Used to collect wages and against income streams in some states.

 

   Federal Wage Garnishment Law (FWGL) - 15 U.S.C. sec. 1671 provides nationwide wage exemption.

 

Writ of Levy - The remedy that allows the Sheriff to grab the asset and auction it off on the courthouse steps.

 

Charging Orders - The "exclusive" remedy against a debtor/member's interest in a partnership, limited partnership, or limited liability company.

 

Assignment Orders - An order used to intercept income streams, such as advertising revenues, royalty payments, etc.

 

Creditor Suits - Actions taken against a third-party who has possession of an asset that is still titled in the name of a debtor, or who has violated some other enforcement process.

 

Receivers - Often the end-game strategy to take a difficult debtor down, by having the court appoint a neutral with all the powers of the debtor, such as to sell season football tickets, or dissolve corporations.

 

 

OTHER JUDGMENT ENFORCEMENT THEORIES - While technically not "remedies", these bodies of law are often used in judgment enforcement proceedings.

 

Alter Ego and Veil Piercing - Cutting through corporations, trusts, and LLCs which are simply the debtor himself in another form.

 

Voidable Transactions (was Fraudulent Transfer and Fraudulent Conveyances) - Used where title has been transferred to a third-party.

 

 

OPINIONS -- Interesting opinions in creditor-debtor law.

 

Debtor Examinations

     Kyne v. Eustice, 215 Cal.App.2d 627, 30 Cal.Rptr. 391 (1963).

Garnishment/Wage Exemptions

     In re Foster, 556 B.R. 233 (Bk.E.D.Va., 2016).

Trusts

     Church Joint Venture, L.P. v. Blasingame, 2020 WL 284527 (6th Cir., Jan. 21, 2020).

 

LAGNIAPPE - A potpourri of stuff.

 

OTHER INFORMATIONAL WEBSITES

BY JAY ADKISSON

 

  • Jay Adkisson - More about Jay D. Adkisson, background, books, articles, speaking appearances.

 

  • Captive Insurance - Licensed insurance companies formed by the parent organization to handle the insurance and risk management needs of the business.

 

  • Asset Protection - The all-time best-selling book on asset protection planning by Jay Adkisson and Chris Riser.

 

  • Voidable Transactions - Discussion of the Uniform Voidable Transactions Act (a/k/a 2014 Revision of the Uniform Fraudulent Transfers Act) and fraudulent transfer law in general.

 

  • Private Retirement Plans - An exploration of a unique creditor exemption allowed under California law which can be very beneficial but is often misused.

 

  • Charging Orders - The confusing remedy against a debtor's interest in an LLC or partnership is explained in reference to the Uniform Partnership Act, the Uniform Limited Partnership Act, and the Uniform Limited Liability Company Act.

 

  • Protected Series - An examination of the single most complex statutory legal structure yet created, with particular reference to the Uniform Protected Series Act of 2017.

 

  • California Enforcement of Judgments Law - Considers the topic of judgment enforcement in California, including the California Enforcement of Judgments Law and other laws related to California creditor-debtor issues.

 

  • Anti-SLAPP Laws - A collection of and commentary about Anti-SLAPP laws and significant court decisions on the subject within the United States, with special California Anti-SLAPP section.

 

© 2020 by Jay D. Adkisson. All Rights Reserved. No claim to original government works. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site https://creditordebtor.com  Contact Jay Adkisson by phone to 702-953-9617, by fax to 877-698-0678, or by e-mail to jay [at] creditordebtor.com