Creditors’ Rights & Commercial Litigation
Garnish Member’s Salary to Collect Past Due Assessments Without Having to Foreclose
Legislatures nationwide have been seeking ways to make it harder for community associations to foreclose on members who owe money to the association. Because of a few high-profile cases, the political climate is such that many of these state legislatures may succeed. But your association still needs to collect assessments, fines, and late fees in order to operate. So what can you do to collect without having to resort to the drastic measure of foreclosure? One thing you can do if you’ve already gotten a money judgment in court against the member and you know where the member works- is to garnish the member’s salary. Often called “wage garnishment,” this allows you to collect a certain percentage of the member’s net salary until the judgment is paid off. It’s available to collect past due assessments, fines, and late fees in every state except Texas, North Carolina, South Carolina, and Pennsylvania. Garnishing wages is the most effective tool associations have to collect money owed to them, according to Paul Williams of ACA International. We’ll give you the basics on wage garnishment and the six steps you must take to garnish a member’s wages.
Garnishment specifics vary from state to state. But in nearly all states, you must first have a court judgment that orders the member to pay you money. The procedure after you get the judgment will depend on the laws of your state, but it usually involves your filling out court forms and giving them to your county sheriff to deliver to the member’s employer. (In legal terms, this is called “serving” the employer. See the box on p. 27 for tips on how to find the employer). Once the sheriff serves the employer, the employer will take out money from the member’s paycheck and send you a check, either directly or through the sheriff. It’s illegal for the employer to ignore the garnishment forms or to fire the member because of them, says Williams. Federal law limits the amow1t you can garnish. In most cases, you can’t collect more than 25 percent of a person’s net weekly earnings after taxes, Social Security, and other required deductions are taken out. Some state laws also limit how much you can garnish. For example, in New York, you can get only 10 percent, and in Wisconsin, you can get only 20 percent, says Williams.
PRACTICAL POINTER: Consult your attorney if you want to garnish the salary of a federal employee or an active member of the military, Williams warns. Different rules apply that often involve specific and highly complex forms and procedures, and if you fail to follow them precisely, your garnishment request will be denied, he says.
Can You Do It Yourself?
It’s smart to use an attorney or a collection agency when you garnish a member’s wages, says Williams. But some managers handle wage garnishment on their own. Consider these factors in making your decision:
- Complexity of garnishment procedure in your state. For example, if you must file the forms in court, as some states require, you may need an attorney.
- Size of your community. If your community is large or you manage many communities, it’s probably cost effective to use an attorney or a collection agency.
- Experience with other legal processes. If you’re comfortable filling out legal papers, you might be able to garnish wages on your own.
Is It Worth It?
Before filling out the garnishment forms and paying the court or sheriff’s fee, evaluate whether garnishment is worth your time and money, says Robin Hein, a Georgia attorney. With small judgments, it’s often not worth it, explains John McMillan, a Florida attorney. Figure out how much it will cost to garnish, including your time. If this amount exceeds the judgment, don ‘t garnish, says McMillan.
Here are the factors to consider:
- Amount of judgment. There’s no cutoff point as to how much a member must owe for you to garnish his wages, says McMillan. But as a general rule, if the judgment is less than a few hundred dollars, it’s probably not worth it, he says. For example, if you have a $300 judgment and garnishment fees cost $1 00, it’s not worth it to garnish. On the other hand, if a member owes you a few thousand dollars, it’s probably worth the work.
- Fees. Depending on your state, the fees may end up costing more than the judgment. For example, in Florida, you must pay a $100 deposit (refundable only if the sheriff can’t serve the employer) and a sheriff’s fee, says McMillan. But in California, according to Brian Stevens, a California collections expert, you pay only $7 for the garnishment forms and $25 for the sheriff.
- Type of job. In some situations, you can predict that the member will quit the job once his salary is garnished, says Stevens. For example, a restaurant busboy probably won’t stick arow1d if his wages are garnished, he says. Look at how long the member has been at the job, the job’s skill level, and whether the nature of the job would make it likely that the member would leave it.
- Member’s salary. Sometimes the employee’s salary is too low and you won’t be able to garnish, says Williams. Federal and state laws prevent you from garnishing the salary of a person whose weekly earnings arc below a certain level. Sometimes you won’t know the member’s salary, says Hein, until after the sheriff serves the forms and the employer calculates how much to withhold.
- Location of member’s job. If the member’s job is in another state, you’ll have to file more legal forms. You’ll also have to sue the member by filing a judgment in that state’s court.
SIX BASIC GARNISHMENT STEPS
Here are the six basic steps you’ll need to take to garnish a member’s wages:
Step #1: Get Forms for Garnishing Wages
When you get a court judgment, tell the court clerk you want to “execute,” or enforce, the judgment by garnishing the member’s wages. Ask the clerk what forms you need, the fees involved, and what steps to take, says Williams. If your judgment is mailed to you, you’ll have to go to the court to get the forms you need and ask about the fees, he says. The forms you need will vary from state to state. For example, in many states, like Tennessee and California, you’ll need to get what’s known as a “writ of execution.” In Arizona, you’ll need a “writ of garnishment.” In some states, like Florida, you’ll need both. In Georgia, you’ll need an “affidavit for continuing garnishment” and a “summons of continuing garnishment.”
Step #2: Fill Out Forms
Fill out the forms required in your state. The forms authorize the employer to withhold money from the member’s paycheck for you. You may need the following information to fill out the forms: the name and current address of the member (if he’s no longer living in the community), the member’s Social Security number, the member’s employer, the amount of the judgment, the fees, and so on. You can get most of the information from your court judgment. When filling out the forms, make sure you get the name of the member’s employer right. Don’t use a shorthand version, says Hein. If the employer isn’t accurately named in the forms, it may be legally able to refuse to garnish the member’s wages.
Step #3: File Forms with Court, if Required
Depending on what state and county you’re in, you might have to file the forms with the court. For example, in Georgia and California, you must do this. But in New York, you can just fill out the forms and give them to the sheriff-no court fi ling is required. If you must file the forms, you ‘ll need to pay a court fee. In some states, you must first try to collect on the judgment on your own and/or wait until the member has a chance to appeal tJ1e judgment before you can file garnishment forms, Williams notes. For example, in West Virginia, you must wait 20 days after getting a judgment before fi ling the forms. In California, you must wait 30 days for a small clain1s filing, says Stevens.
Step #4: Give Forms to Sheriff to Serve Employer
Once you file the forms in court (if required), give the completed copy of the forms to your county sheriff. Your sheriff or Marshall will then serve the garnishment forms on the employer. Depending on how busy the sheriff is, it may take a week or so before he serves the forms, says Stevens. Once the sheriff serves the employer, says Stevens, the employer must comply with the garnishment order.
In most states, the clerk of the court will then notify the member of the proposed garnishment. In some states, like Florida, you don ‘t have to notify the member, says McMillan. In other states, like Colorado, you must serve the forms on the employer and the member yourself. If your state requires you to serve the forms yourself, ask your attorney for help or ask the clerk of the court how to serve the forms. Depending on your state, the employer will either pay you directly or send payment to the court, which will then send you a check. Or the employer will send the check to the sheriff, who will then send the check to you. You’ll get a check either every month or every other month.
In some states, like Colorado, you can garnish for only a certain time period. Then you must re-file new garnishment forms. In many states, though, you need only one set of garnishment forms, and you may continue to garnish an individual’s salary until the judgment is paid off.
Step #5: Pay Fee to Sheriff
You must pay a sheriff If’s fee to cover costs. For example in New York, the sheriff ‘s fee is approximately $60. Once the forms are served, don’t r—- ————————, expect a refund, even if the member offers to settle and you never actually garnish wages. After all, the sheriff’s job is to serve the forms, not to ensure collection of the money.
Step #6: Collect Money Each Month
Once the sheriff serves the employer, the employer may have to wait a certain number of days, depending on your state’s Jaw, before taking the money out of the member’s wages. For example, in California, an employer must wait I 0 days after getting the garnishment forn1s, says Stevens. In other states, an employer must wait 30 days, says Williams. This gives the member a chance to challenge the garnishment. For example, he may claim that the garnislm1ent imposes an undue hardship on him because he can’t support his family. After the waiting period is over, the employer should begin taking money from the member’s paycheck (assuming that the member doesn’t challenge the garnishment). But if the member has other judgments against him that are already being garnished, they will take priority.
How to Track Down Where Member Works
To garnish a member’s wages. you must find out where the member works. Here are a few ways of doing this.
Prejudgment discovery. Because you’ll first have to get a judgment against the member before you can garnish his wages. you’ll have an opportunity during the lawsuit’s discovery process to find out where he works. says Georgia attorney Robin Hein. Whether in a deposition (where your attorney gets to ask the member questions face to face). or interrogatories (written questions that the member answers and sends back to your attorney in writing). ask the member if he has a job and. if so. where he works. These questions are usually permissible at this stage of a lawsuit. says Hein.
Employer and phone number. If you call the employer the member told you about during the lawsuit and he no longer works there. ask if the employer’s human resources department has a forwarding phone number for the member’s current employer. Be sure to get the full company name so that you have the correct formal name to put on the garnishment forms.
Employment supervisor. If the employer’s human resources department doesn’t have forwarding information for the member. his former supervisor may have the information. says Brian Stevens, a California collections expert.
Social Security number. If you know the member’s Social Security number you may be able to pull his credit report. Sometimes the person’s present employment is listed on the report, says Stevens. But Stevens warns that credit reporting bureaus have specific rules about the reasons for which they’ll allow you to see credit reports, so you’ll have to check with the bureau, your collection agency, or your attorney.
Emergency contacts. If you have emergency contacts for the member. You can call them and ask in a polite tone where you can reach the member. Says Stevens. “Sometimes this works:· he says, “and the person will tell where you can find the member:· If the person asks who you are, you can identify yourself. says Stevens. Be careful what you say about the member when you call the employer or other contacts. Be professional and don’t mention that you’re collecting money the member owes the association, says Hein. The member could sue you for slander or defamation-that is, saying untrue things that damage his reputation.