Garnishment Information – Frequently Asked Questions (FAQ)
GARNISHMENT (EARNINGS) QUESTIONS
1. What is the Court’s address to mail the Answer? The Court’s address is located on page 6 of the garnishment packet. Please note, the original Answer must be filed with the Court with a copy provided to our office and the Judgment Debtor. Alternatively, you can mail the original Answer to our office and we will forward it to the Court on your behalf. Note: If you forward the original Answer to our office, you will still need to provide the Judgment Debtor with a copy of the Answer.
2. How long does a Garnishee have to complete the Answer? Ten days from the date of service on the company whether it was service on their statutory agent, the defendant’s place of employment, or the local payroll office. If the garnishment paperwork was sent to an out-of-state payroll office after being served here in Arizona, the Answer must be returned within 10 days from the date it was legally served in Arizona, NOT 10 days from the date the documents were received by the out of state payroll office.
3. When does the Garnishee remit money for the garnishment? After they receive the signed Order for Continuing Lien. This usually will take approximately 1 month from the date the Garnishee signs the Answer because we allow 15 days for the defendant to file a Request for Hearing (should they opt to do so) before we prepare the Order and then it can take the Court up to 2 weeks to return the signed Order to our office. Although the Garnishee should be withholding the entire time, they should refrain from sending funds until they receive the signed Order for Continuing Lien because in the event the defendant does request a hearing, the Court may reduce the garnishment to as low as 15% from the statutory 25% and then the Garnishee would have over withheld and the defendant would have a credit balance. Also, in the event the defendant files bankruptcy prior to the Order for Continuing Lien being signed, all funds withheld will need to be returned to the defendant.
4. How often does a Garnishee send money? Once the Order for Continuing Lien is signed, the Garnishee can remit funds after each pay period or can wait to send one payment each month. We must receive money at least once a month. We do not accept quarterly payments.
5. What if the defendant is being garnished for another (prior) lien (i.e. child support, IRS, other creditor, etc.)? Just because the defendant is subject to another garnishment, it does not mean a Garnishee does not have to honor our garnishment nor does it mean the Garnishee doesn’t have to complete the Answer. If there is enough money left over after the prior garnishment(s), we may still be entitled to receive something. The Garnishee needs to complete the Non-Exempt Earnings Statement as if our garnishment was the only one up through question #6. This is where the amount for the prior lien(s) will be placed. If the amount we are entitled to (#5) minus the amount deducted for the prior garnishment(s) (#6) is a positive number, we are entitled to that amount. If it is zero or a negative number, we are not entitled to any money. Situations such as the defendant’s ability to earn overtime or if the garnishee is required to withhold only a certain amount for a prior lien each month and there is an extra pay period where we would be entitled to the full 25%, we could still be entitled to funds. If we are not entitled to any money for a period of 60 days straight because of a prior lien, our garnishment will automatically expire.
6. How often do I have to withhold money? Every pay period. A Non-Exempt Earning Statement needs to be completed for each pay period. The defendant is to receive a copy along with a Request for Hearing form, the Garnishee is to retain a copy, and a copy needs to be sent to our office. If the Garnishee wants to remit one check each month which is a combination of that month’s garnishment funds, we will accept such payments as long as we receive something once a month. We do not accept quarterly payments.
7. How much do I deduct from each paycheck? Use the Non-Exempt Earnings Statement worksheet provided in garnishment packet. In most cases, you will deduct 25% of the defendant’s NET pay. Note: NET PAY is gross pay minus taxes only. If the defendant is having money withheld for medical insurance, dental insurance, 401K program, or any other voluntary bill, these amounts need to be added back in. If you need assistance with completing this form, please contact our office. Please note, you must send all completed Non-Exempt Earnings Statements to our office or you could be required to appear in court for failing to comply with the garnishment statutes which could lead to your being assessed attorneys’ fees and court costs associated with the court appearance and/or a Judgment against your company for said non-compliance.
8. What is the Federal Minimum Wage? The current Federal Minimum Wage is $7.25. The State of Arizona’s Minimum Wage is $12.80. Please note, if these amounts differ, the higher rate applies. If you require proof of this information, please see the U.S. Department of Labor’s website, or http://www.dol.gov/whd/minwage/america.htm.
9. What if I am served with another garnishment after yours? The only garnishment that would take precedence over our lien would be those for support of a person (i.e. child support or spousal support). Please note, the IRS does not take precedence unless their levy was served prior to our garnishment. If you have any questions regarding this, please contact our office.
10. If the defendant requests a hearing, do I still have to withhold or do I need to wait to see what the outcome of the hearing is? The Garnishee is required to withhold funds from the date they are served with the garnishment (next pay period unless it falls within 3 days from the date of service – then the next pay period afterward). The Garnishee is not to remit the garnished funds until an Order for Continuing Lien is signed. If the defendant requests a hearing, the Order will be signed at the hearing. If the defendant does not request a hearing, the Order will be signed after approximately 1 month from the date the Answer was notarized. Upon our receipt of the signed Order from the court, we will forward a copy of the Order to the Garnishee. At that time, they can start sending payments on a regular basis to our office.
11. Where do I send the garnishment check? Payments are to be mailed to our office. The checks should be made payable to Hammerman & Hultgren, P.C. and not to our client, who appears as the Plaintiff. If the check was already cut, we can accept a payment made payable to our client, but make sure the information is corrected for future checks.
12a. I think I am getting close to withholding the balance. How can I get an exact payoff? You can contact our office at any time to obtain the exact payoff. The biggest discrepancy between the actual balance and the garnishee’s balance is that most garnishees do not accrue interest as stated in the Writ.
12b. What if we overpay? If we need a portion of a final check to cover the balance, we will cash the check, use the portion needed to pay the balance in full, and will issue a company check for the difference to the debtor. This check will be sent to the debtor along with the Release of Garnishment and Satisfaction of Judgment. If we have already received payment in full from a previous garnishment check, we will return any subsequent checks to the garnishee to reimburse the debtor.
13. What is this printout I keep getting once a month (or once ever quarter)? Pursuant to the garnishment statutes, we are required to provide you with an update of the Judgment Debtor’s balance every month or every quarter, depending on the balance. This helps to prevent over- or under-withholding on your part. If you believe you are close to remitting the remainder of our Judgment balance, please do not hesitate to contact our office for an exact payoff.
14a. I sent your offices a copy of the Answer, why did I get this “nasty” letter saying we didn’t Answer?
14b. I sent your offices a copy of the Answer, and we have been remitting money and the Non-Exempt Earnings Statement, so why did I get this “nasty” letter saying we didn’t Answer? If you received a letter from our office stating you did not answer the Writ of Garnishment, either you did not forward a copy to our office when filing the original with the Court, or the document was lost en route to our office. If the original was sent to our office, please send a new original, making sure the Answer is notarized to avoid further delay. Otherwise, please fax or mail us a copy of the Answer that you filed with the Court.
15. The debtor’s employment has ended with our company prior to the satisfaction of the Garnishment. Is there anything I need to do? YES – you need to inform our offices, in writing, that the debtor is no longer employed and provide the last date of employment. Please note, the garnishment will remain in effect for 60 days from the date of the debtor’s last paycheck. So, in the event the debtor returns to your employ within this timeframe, you will need to notify us so we can continue to monitor the garnishment. Otherwise, we will contact you after 60 days to verify the defendant has not returned and will release the garnishment.
16. The debtor told me that he took care of this and we don’t have to withhold from his paycheck anymore. There’s nothing else I have to do right? Incorrect. You are NOT to stop withholding money unless our offices have advised you to do so, or you get served with a higher priority garnishment (support of a person only – NOT IRS). If you stop the garnishment without verifying the status with our office, your company may be liable for not complying with a court order.
17. What if the Debtor files bankruptcy? If the debtor files bankruptcy, the Garnishee must notify our office immediately and provide us with proof (e.g., copy of Petition with filing date and case number). If the bankruptcy was filed prior to the date the Order for Continuing Lien was signed, all garnishment funds being held must be returned to the debtor. However, if the bankruptcy was filed after the Order for Continuing Lien was signed, the Garnishee must remit all garnishment funds.
18. My office or Statutory Agent was just served with an Order to Show Cause which requires me to appear in Court. What is this and what can I do to correct it? There are two types of Order to Show Cause forms that can be filed with the court:
Order to Show Cause re: Failure to File an Answer of Garnishee:
- This document is filed with the Court because the Garnishee has failed to comply with the Arizona Garnishment Statutes by not filing an Answer of Garnishee. Prior to filing an Order to Show Cause with the court, we send a letter to the Garnishee at their main address and in care of their Statutory Agent advising them that we have yet to receive their Answer. If this letter goes unanswered, we will file the Order with the Court.
- In order to avoid the Court appearance, the Garnishee must comply with the Rules by getting us the complete, original Answer of Garnishee prior to the Court date. If you have any questions, please contact our Garnishment Department.
Order to Show Cause re: Contempt
- This document is filed with the Court because the Garnishee has failed to withhold and/or deliver the garnishment funds to our office. In order to avoid the Court appearance, the Garnishee must provide our office with all Non-Exempt Earnings Statements to date along with a check for the garnishment funds prior to the Court date. If you have any questions, please contact our Garnishment Department.
- Please note, should we have to appear in Court on either of the above Orders, we will request attorney’s fees and court costs. Additionally your company may be found liable by the Court for a portion or all of the Debtor’s current balance, plus attorney’s fees and costs for the appearance. As a result, the court may enter a Judgment against the Garnishee for failure to comply with the Arizona Garnishment Statutes. In this event, we will look to collect on this judgment in any way possible.
19. I was just served with an earnings garnishment for an independent contractor. Since this individual is not an employee, I do not need to honor the garnishment, right? Incorrect. An earnings garnishment not only applies to employees who earn a regular paycheck, but also to those individuals or businesses who are otherwise owed money by your company within 60 days from the date you were served. This could apply to real estate agents who earn commissions or janitorial services who service tenants in a building. As long as monies are owed to that individual or business within the applicable time period, the garnishment applies. If you fail to honor the garnishment, you could be held in contempt for failing to comply with the garnishment statutes.
THE INFORMATION CONTAINED IN THIS WEBSITE SHOULD NOT BE CONSTRUED AS LEGAL ADVICE. IF YOU ARE IN NEED OF LEGAL ADVICE PLEASE CONTACT YOUR OWN COUNSEL. IF YOU DO NOT HAVE COUNSEL, YOU MAY CALL LAWYER REFERRAL AT (602) 257-4434