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Legal Matters: Writs of garnishment and small business owners

You are a small business owner. You have an employee who has racked up unpaid debts. Not your problem, unless you receive a writ of garnishment from one of her creditors.

The writ makes the worker's situation partly your problem. You will not be out of pocket for it, but like it or not, you are, in legal speak, the garnishee. That means you are required to help the creditor collect the debt.

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The garnishment process began when the creditor went to court to get a money judgment against the employee. She should have received notice of the court date, and she could have used that opportunity to try to reach a repayment agreement with the creditor. If she blew off the hearing or they could not agree on repayment terms, the creditor likely asked for a judgment that she owed the debt and a writ of garnishment to allow him to collect the money owed.

The creditor will be repaid by having you, the garnishee, deduct a specified amount from the employee's paycheck and forward it directly to him.

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A few exceptions allow creditors to skip the court process and begin garnishment without a judgment. Exceptions include unpaid income taxes, court-ordered child support or child support arrearages and defaults on federal student loans.

Before the creditor can start collecting on his money judgment, he must send you, the employer, a copy of the writ and an answer form. You are required to fill out the form and file it within 30 days of service of the writ. It asks questions to which the creditor needs the answers, such as whether the person named is in fact employed by you, her rate of pay and whether she has any prior liens against her.

Prior liens or garnishments are important because state law limits how much of an individual's salary a creditor can take. In Maryland, the amount varies by individual county. In Carroll, a creditor can garnish up to 25 percent of your disposable earnings or $145 multiplied by the number of weeks you work, whichever is less. Disposable earnings are the wages remaining after the employer has taken out deductions required by law, such as Social Security withholding.

If the employee has several creditors, all trying to garnish her income, the total taken cannot legally exceed 25 percent. If there are two creditors and one is drawing 15 percent of her paycheck, the other cannot receive more than 10 percent.

It would not be smart for the employer to throw the garnishment answer form onto the "I'll get to that sometime" pile. If you, the garnishee, fail to file an answer within 30 days after service of the writ, the creditor can ask the judge to hold you in contempt for not answering on time.

The debtor has the right to file a motion with the court at any time, asserting a defense or objection. A defense might be, for example, that someone stole her identity and made charges that she did not know about or authorize.

Donna Engle is a retired Westminster attorney. Reach her with questions or feedback at 410-840-2354 or denglelaw@gmail.com. Her column, which provides legal information but not legal advice, appears on the second and fourth Sunday each month in Life & Times.

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