Wage Garnishments

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Author: Revisions contributed by Michelle Weinberg, Legal Assistance Foundation of Metropolitan Chicago
Last updated: August 2011

Wage Deductions

Another legal tool for creditors, available only if the consumer fails to pay a judgment, is called a wage deduction proceeding. It is sometimes referred to as a wage garnishment. It is properly called a wage deduction because the creditor is trying to get the employer to deduct a certain percentage of wages from the consumer’s paycheck and to have that amount sent to the creditor.

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Wage Deduction Procedure

A wage deduction procedure cannot start before the creditor gets a court judgment. Afterward, a creditor can file a document with the court clerk called a "Wage Deduction Affidavit". There, the creditor states their belief that the debtor’s employer owes the creditor wages. In that affidavit, the creditor must certify that, before filing the affidavit, he mailed a "wage deduction notice" (explained below) to the debtor at the debtor's last known address. That address must also be stated in the affidavit.

At the same time the affidavit is filed, the creditor also files with the court clerk and sends to the employer a set of written questions (called "interrogatories").

These interrogatories are to enable the creditor to determine how much wages the employer owes the debtor over a stated period of time, and to determine the proper amount of non-exempt wages that can be deducted. The employer is required to answer these interrogatories, file them with the court, and to mail or deliver a copy of its answers to the creditor and to the debtor.

When the court clerk receives the affidavit and interrogatories from the creditor, the clerk will issue a summons which will be served on the employer. The summons will tell the employer the time to file its answer to the interrogatories and the date the matter will be heard in court.

The employer is required to pay the debtor the amount of the employee's exempt wages. However, the employer must hold, subject to orders from the court, the amount of non-exempt wages due or which may later come due during the period of the wage deduction. The wage deduction will stay in place until the judgment debt is paid off. (See section on Exemptions. Of course, the employer cannot withhold more than the amount due on the judgment.) 

On the return date in court (stated on the summons), the court will decide whether the employer should turn the money being held over to the creditor.

No deduction order is allowed to be entered in favor of the creditor unless the Wage Deduction Affidavit certifies that a copy of the Wage Deduction Notice (see immediately below) has been mailed to the debtor and the employer’s answer to the interrogatories provides a summary of the computation used to determine the amount of non-exempt wages.

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Wage Deduction Notice

The notice which is mailed to the debtor must be in a particular form set by statute. Among other things, the notice:

  • Must identify the court case and inform the debtor that the creditor has started a proceeding in court to force the debtor’s employer to deduct a portion of the employee debtor's wages;
  • Will explain the date and time the matter is to be heard in court;
  • Must also explain that the amount of wages that may be deducted is limited by federal and Illinois law;
  • Explains the mathematical formula for determining the amount of wages that lawfully can be deducted and the amount of wages that are protected (i.e., exempt);
  • Tells the debtor of the right to request a hearing to dispute the wage deduction because the wages are exempt;
  • Explains how to obtain that hearing.

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What the Employee Should Do if the Employer Is Deducting Wages

The debtor employee should determine how much money the employer is deducting from the paycheck. The employee should then figure out if they are taking more than they are allowed to take (see section of this manual on Exemption Rights). If so, the employee should inform the employer and insist that they take out only the lawful amount. When the debtor gets a copy of the employer’s answers to the interrogatories, the debtor should look to see how much non-exempt wages the employer says it has withheld.

If the employer continues to withhold too much from the check, the debtor should follow the instructions on the Wage Deduction Notice that tells the debtor how to request a hearing to ask the court to declare the proper amount of wages exempt.

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The Employee Cannot Be Fired or Suspended Due to a Wage Deduction

No employer may discharge or suspend any employee because his or her earnings have been the subject of a wage deduction proceeding.

This protection for the debtor is only for a single debt. If an employer has to deal with a wage deduction from a second creditor on a different debt, then this protection is no longer available.

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Non-Wage Garnishment

A creditor with a court judgment not only can garnish wages, but also can garnish money belonging or owed to the debtor that is in the hands of other third parties. The term "garnish" means to take. Most often, a non-wage type of garnishment takes money from a debtor’s bank account, although it can also be taken from an insurance company or anyone else who owes money to the consumer.

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The Garnishment Procedure

The procedure for a non-wage garnishment is very similar to the wage deduction process. It cannot start before the creditor obtains a court judgment. Afterward, the creditor can file with the court clerk an affidavit in which the creditor states his belief that the debtor’s bank (or some other person) has the debtor’s property in their control or otherwise owes money to the debtor. The bank or other person is known as the "garnishee".

The creditor also files a copy of a "Garnishment Notice" which must be mailed to the debtor (see below).

Finally, the creditor must also file with the clerk a set of written questions (called "interrogatories") to be answered by the garnishee. The purpose of the interrogatories is for the creditor to determine how much non-exempt money or property is being held by the garnishee.

The bank or other garnishee is required to answer these interrogatories, file them with the court, and to mail or deliver a copy of its answers to the creditor and to the debtor.

When the court clerk receives the affidavit, the Garnishment Notice and the interrogatories from the creditor, the clerk will issue a "garnishment summons" which will be served on the garnishee (e.g., the bank). The summons will tell the garnishee the time to file its answer to the interrogatories and the date the matter will be heard in court.

The garnishee is required to hold, subject to orders from the court, the amount of non-exempt money or property it is holding, up to twice the amount due on the judgment.

On the return date in court (stated on the summons), which takes place between 21 and 30 days after the summons is issued, the court will decide whether the garnishee should turn the money being held over to the creditor.

No deduction order is allowed to be entered in favor of the creditor unless the court record shows that a copy of the garnishment summons and the Garnishment Notice (see below) were mailed to the debtor, by first class mail, within 2 business days of service of summons on the bank or other garnishee.

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The Garnishment Notice

The notice which is mailed to the debtor must be in a particular form set by statute. Among other things, the notice:

  • Must identify the court case and inform the debtor that the creditor has started a proceeding in court to force the bank or other garnishee to turn over monies in the account to pay off the judgment;
  • Will explain the date and time the matter is to be heard in court;
  • Must also explain that the amount of money or property (other than wages) that may be garnished is limited by federal and Illinois law;
  • Must explain what amount of money or property is protected from garnishment (called "exemptions"). (See section in this manual on Exemption Rights);
  • Tells the debtor that the debtor has the right to request a hearing to dispute the garnishment or to ask the court to declare certain of the money or property exempt and explains how to obtain that hearing.

 

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How Much Money Can Be Garnished from the Bank Account

When the bank or other garnishee receives the summons, they are required to freeze any "non-exempt" funds in the account, up to the amount of the judgment. A freeze means that the debtor cannot withdraw that money nor can it be used to pay any checks written by the debtor. The debtor should be careful not to "bounce" checks in this situation. Federal regulations went into effect on May 1, 2011, that prohibit banks from freezing the last two months of electronic direct deposited exempt benefits, such as Social Security or Veteran’s benefits.

The court can later order that frozen funds be turned over to the creditor. (The debtor can prevent this from happening by withdrawing the funds before the bank is served with the summons. However, the debtor will not get notice of the garnishment until after the bank has been served with the garnishment summons or third party citation to discover assets.) In addition, many banks receiving a garnishment summons will charge the account holder a small fee for its services in processing the garnishment. The bank may charge a garnishment fee even if all of the funds in the account are exempt.

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What the Debtor Should Do if the Bank Has Frozen the Account

Remember, the bank is permitted to freeze only non-exempt funds. However, the bank may not know what amount of the funds are exempt. If the bank does freeze the account (or part of it), then the debtor should inform the bank and the creditor if any of the money it has frozen is exempt.

For example, every debtor has a "wildcard" exemption of $4,000 in any property of the debtor's choice. The debtor can choose to have up to $4,000 in the frozen account declared exempt under this "wildcard" exemption. In addition, most forms of government benefits, including Public Aid and Social Security, are exempt. If the account consists entirely of these exempt government funds, then the entire account is exempt.

However, in most cases, without a court order, the bank will refuse to release any funds other than the last two months of directly deposited federal benefits. Therefore, the debtor will have to go to court to exercise this exemption. The Garnishment Notice tells the debtor how to obtain a hearing to get the court to declare the funds in the account exempt.

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