Many people go through a divorce, receive a money judgment against their former spouse for something other than child support or spousal maintenance, and then do not know what to do with it when the other former spouse does not pay the judgment. Unlike a child support judgment or a spousal maintenance judgment, the State of Arizona will not help you enforce the judgment and you must do so yourself. Different rules apply to different kinds of judgment, but this article is only about a regular money judgment, such as for property.
The first thing you should do with a money judgment is record it with the county recorder. Often, the best choice for your second step in collecting a judgment is a wage garnishment. This depends on whether the judgement debtor has a wage-earning job. Arizona state law limits the amount that you can garnish from the other party’s paycheck. Federal law also limits what a judgment creditor may garnish from a judgment creditor’s paycheck, but federal limits are the same as Arizona’s limits. Creditors can only garnish nonexempt wages, and the amount they can take is generally limited to 25% of net pay.
The players in a wage garnishment are the court, the judgment creditor (the person who has the judgment against the other person), the judgment debtor (the person who has a judgment against him or her), and the garnishee (the judgment debtor’s employer).
A wage garnishment is an order from a court that a judgment creditor serves on the garnishee, called a writ of garnishment. The writ of garnishment requires the judgment debtor’s employer to withhold a certain amount of money from the judgment debtor’s paycheck and send this money directly to the judgment creditor.
A creditor holding a regular money judgment can start a garnishment proceeding when he or she has a judgment signed by the court. Certain other types of creditors, such as the IRS, the Department of Revenue, a person to whom you owe child support, or an entity holding a defaulted student loan, have different rules.
Arizona law limits how much money a judgment creditor may take from a judgment debtor’s paycheck through a wage garnishment. A court may issue a writ of garnishment of no more than 25% of the judgment debtor’s non-exempt net earnings; or the amount of a judgment debtor’s non-exempt net weekly earnings that exceed 30 times the federal minimum wage. "Net earnings" means the judgment debtor’s wages minus deductions that the employer makes that the law requires, such as income tax withholding. "Non-exempt" earnings means income that is not exempt pursuant to law. Examples of income that is exempt pursuant to law include Social Security Disability, VA disability, and child support. There are other examples, but these are the most common examples.
The judgment debtor also has a right to request a hearing to contest the validity of the garnishment. The judgment creditor can also use the hearing to ask the court to lower the amount that the garnishee withholds from 25% to 15% of his or her net earnings. Also, only 25% of a judgment debtor’s net earnings is subject to garnishment. This means that two judgment creditors may not garnish 25% of the judgment debtor’s earnings apiece; only 25% of the judgment debtor’s earnings is subject to garnishment no matter how many judgment creditors are seeking a wage garnishment.
A writ of garnishment is a hassle for many employers and some may rather terminate an employee instead of continue to comply with the writ of garnishment. However, pursuant to federal law, the garnishee may not terminate the judgment debtor for one garnishment but, federal law does not protect a judgment debtor with two garnishments from termination. In Arizona, a garnishee cannot fire a judgment debtor because you have a child support withholding order. Employers may ask new hires, returning employees, or rehired employees to disclose whether they have an existing child support withholding order, but the employer cannot base any hiring or firing decisions on such information.
Not many family law attorneys do collection work on their clients’ judgments that are not for family support. If you have a money judgment to collect or have someone seeking to collect from you, contact Thomas A. Morton, PLLC for a consultation.