Can Wages Be Garnished for Repos in Georgia?

Failing to make payments on collateral, such as furniture, a car or electronics, results in repossession of the collateral by the lender. Repossession negatively affects your credit and deprives you of the property you need to maintain your current lifestyle. Repossession also has other consequences. For example, in Georgia, repossession can lead to wage garnishment in certain cases.

Deficiency

In Georgia, wage garnishment for a repossession typically results from a deficiency, which is the balance of the loan after the lender has sold the repossessed collateral. The lender typically sells or auctions the property to recover part of the unpaid loan balance; however, the sale proceeds may not be enough to satisfy the debt. The lender also could add repossession, storage and sale costs to the deficiency amount.

Judgment

Before a private creditor can execute wage garnishment for a repossession deficiency, a legal judgment must be obtained against you. The lender starts the judgment process by filing a lawsuit for the deficiency amount, which in Georgia takes place in a magistrate court. You will have an opportunity to show that you already paid the deficiency or that the lender filed the lawsuit improperly. If you cannot provide one of these defenses, the magistrate court will award a judgment to the creditor for the deficiency, plus interest and judgment costs.

Garnishment

After creditors receive a judgment for the repossession deficiency, they apply to the court for a writ of garnishment, which authorizes the creditors to garnish your wages. Georgia law permits a judgment creditor with a valid writ of garnishment to take up to 25 percent of your disposable income, which is your earnings after your employer has deducted taxes. Voluntary deductions, such as health insurance and retirement plan contributions, do not reduce your income for the purpose of calculating garnishment.

Exemptions

Georgia follows federal law, which provides a garnishment exemption for workers whose earnings fall below a specified threshold. The threshold is 30 times the current federal minimum hourly wage per week -- as of August 2011, this is 30 times $7.25, or $217.50 per week. Georgia also provides exemptions for non-wage income such as disability or annuity payments up to $250 per month, as well as worker's compensation and some government pension payments. Social Security benefits also are protected from garnishment for a repossession deficiency.