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Wage Garnishment Terms
To garnish is to take property – most often a portion of someone’s wages – by legal authority.
Garnishment is a proceeding by a creditor (a person or entity to whom money is owed) to collect a debt by taking the property or assets of a debtor (a person who owes money).
Wage garnishment is a court procedure where a court orders a debtor’s employer to hold the debtor’s earnings in order to pay a creditor.
The garnishee is the person holding the property (money) of the debtor. An employer may be a garnishee because the employer holds wages to be paid to an employee (who is a debtor).
NOTE: In this article, the garnishee is referred to as the "employer," and the debtor is referred to as the "employee."
Wage Garnishment Procedure
The following processes are based on District Court Rules of Procedure. They apply if you have a judgment in the District Court of Maryland. See Md. Rules Title 3, Chapter 600. The rules for garnishing property in Circuit Court are very similar, but there may be some differences. See Md. Rules Title 2, Chapter 600. There are many court forms available, but there may not be a form that fits every situation and you may need to draft your own document. If you have questions about court procedure, talk to a lawyer.
Read the Rules: Md. Rules, Title 3, Chapter 600 (District Court); Title 2, Chapter 600 (Circuit Court)
Issuance of Writ of Garnishment
A creditor begins the wage garnishment process by filing a Request for Garnishment on Wages (District Court: DC-CV-065; Circuit Court: CC-CV-065R) with the court. The creditor must file the request in the action in which the judgment was obtained and pay court fees to file the request.
After the request is filed, the court clerk or a judge signs the Request, and it becomes a Writ of Garnishment. The Writ of Garnishment orders the employer to hold any property (typically wages) of the employee that the employer has at the time the Writ is filed.
The creditor must serve the Writ of Garnishment on the employer via certified mail (restricted delivery), private process, or sheriff/constable. The creditor may incur fees to serve the employer with the Writ of Garnishment. Learn more about service of process.
NOTE: Interest grows on most judgments that an employee owes a creditor, and court fees and costs may be added to the judgment. It’s a good idea for employers to communicate with the creditor and the employee to make sure the right amount of money is paid to the creditor.
Read the Law: Md. Code, Commercial Law § 15-602
Response to Writ of Garnishment
The employer must file an answer to the Writ within 30 days of being served. In the answer the employer must indicate:
- if the employee is employed,
- the employee's rate of pay, and
- any existing wage garnishments.
An employer may contest the garnishment. If the employer wishes to do so, the employer must assert their defense against the garnishment in their answer.
If the employer does not respond to the Writ of Garnishment, the employer may be held in contempt of court, and the creditor may receive a default judgment against the employer.
NOTE: An employee may also contest the garnishment by filing a motion explaining their defense or objection to the Writ of Garnishment.
Read the rule: Md. Rule 3-646
Withholding Wages
After the Writ is served on the employer, the employer must determine the amount of the employee’s “garnishable wages” for each pay period. As directed by the Writ, the employer must withhold garnishable wages until the judgment is satisfied, or until the court orders the employer to stop withholding. The employer must distribute garnished wages to the creditor, or the creditor’s attorney, within 15 days after the close of the employee’s last pay period.
The law limits the amount of earnings that can be garnished to 25 percent of the employee’s disposable income. Disposable income is the amount of earnings present after legally required deductions (e.g. federal or state taxes, Social Security, unemployment, medical insurance). For employees earning near minimum wage, the employee must be left with an amount equal to 30 times the federal minimum hourly wage. Tips are generally not considered disposable income because they do not come from the employer. So, tips are not usually subject to garnishment.
NOTE: These limitations do not necessarily apply for collection of child support or past due child support.
Each pay period, the employer must inform the employee of the amount withheld and the method used to determine the amount. This information can be provided on the pay stub.
If the employer receives another garnishment, it must follow the same procedure, but the employer should not pay a subsequent creditor until the first garnishment is paid in full. Once the first garnishment is completely paid, the next one goes into effect. Thus, if there are multiple garnishments, then the first one must be satisfied in full before any later garnishments are paid.
Read the law: U.S. Code, Title 15 § 1673; Md. Code, Commercial Law § 15-601.1; § 15-603
Read the rule: Md. Rule 3-646
Termination
The employer must tell the court and all parties if the employee stops working or is fired. The garnishment terminates (ends) 90 days after the end of employment, unless the employee is re-hired by the employer during that period.
Read the rule: Md. Rule 3-646
An employer may not fire or dismiss an employee for 1 wage garnishment in 1 calendar year. If an employer violates this law, they are subject to a fine not exceeding $1,000 or imprisonment not exceeding one year or both.
Read the law: Md. Code, Commercial Law § 15-606
Penalties
If the employer fails to comply with the law, then the court may cite the employer for contempt of court and assess attorney’s fees and court costs.
If the creditor fails to comply with the provisions of the law, the court may dismiss the garnishment and assess attorney’s fees and costs.
Read the rule: Md. Rule 3-646
Employer Defenses
An employer can oppose the garnishment by filing a motion with the court. The employer may assert any defense that the employer may have to the garnishment, as well as any defense that the employee could assert.
An employer is not required to turn over property that is not in its possession or to collect any tips that have been paid directly to the employee by customers.
An employer may also claim that the garnishment sought by the creditor is exempt earnings that belong to the employee. The court may release some or all of the property if the judgment has been vacated, has expired, or has been satisfied, if property is exempt, or if the creditor fails to comply with court rules.
Duties of Creditor
Application of Garnished Wages
Creditors who receive wage garnishments from an employer must apply payments:
- first to accrued interest on the judgment,
- then against the principal amount of the judgment,
- and lastly against attorney’s fees and court costs assessed against the employee.
Notification Requirements
Within 15 days after the end of each month that the creditor receives payment from the employer, the creditor must mail the employer and the employee a statement listing the payments that it received and how it applied those payments to the judgment’s principal, costs, interest, and fees. This form is not filed with the court, but the creditor must keep a copy of each statement until 90 days after the garnishment ends. Any party, or the court, may ask to look at these statements. If you are not sure how much money the employee still owes, ask the creditor for a copy of this statement.
Read the rule: Md. Rule 3-646
Statement of Satisfaction
Once the total amount is paid off, the creditor must file a written statement (DC-CV-031) within 15 days noting that the amount has been satisfied. If they fail to do so, then the employee may file a motion to declare that the judgment has been satisfied. If the creditor fails to comply with the provisions of the law, the garnishment may be dismissed and creditor may be assessed attorney’s fees and costs.