Garnishment Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Garnishment, written in plain English, along with examples of how it is used.
What is Garnishment?
(n) Garnishment is the process of getting a court order directing a person or entity to withhold the funds, or the payments due to another person or entity against whom a legal claim is pending for disposal.
History and Meaning of Garnishment
Garnishment is a legal process in which a person's wages, bank account, or other assets are withheld to pay off a debt or obligation owed to another party. This process dates back to medieval times when creditors would physically seize a debtor's property and hold it as collateral until the debt was repaid. Today, garnishment is still used as a way to collect on unpaid debts or judgments.
In the United States, specific laws govern the process of garnishment, including the type of debts that can be garnished, how much can be taken, and the procedure that must be followed. Typically, garnishment requires a court order in which a judge authorizes a creditor to seize a portion of a debtor's income or assets. This can be a difficult process for both the debtor and creditor, and there are often legal challenges to the amount being garnished.
Examples of Garnishment
John owes $10,000 in credit card debt to XYZ Bank. When he fails to make a payment for several months, the bank files a lawsuit against him and wins a judgment for the unpaid debt. The bank then obtains a court order for garnishment of John's wages, requiring his employer to withhold a portion of his paycheck to pay off the debt.
Mary is behind on her car payments, and the bank has threatened to repossess the vehicle. To avoid repossession, Mary works out a payment plan with the bank that includes wage garnishment. Her employer is required to withhold a portion of her paycheck each month until the debt is fully paid off.
A small business owner owes back taxes to the government. After ignoring several notices and warnings, the government obtains a court order for garnishment of the business's bank account. The bank is required to freeze the account and withhold funds to pay off the outstanding tax debt.
Legal Terms Similar to Garnishment
Lien - Like garnishment, a lien is a legal claim against a debtor's property as collateral for an unpaid debt. However, liens often involve physical property and can be voluntary, whereas garnishment is typically involuntary and involves wages or bank accounts.
Seizure - Seizure refers to the act of physically taking a debtor's property as collateral for an unpaid debt. It is less common than garnishment and is often used in cases of tax debt or criminal fines.
Levy - A levy is similar to garnishment in that it involves the seizure of assets to pay off a debt. However, a levy is issued by a government agency and is typically used to collect unpaid taxes or fines.