Garnishment is a court process that allows a judgment creditor to recoup the debt owed it by taking a portion of your wages or other assets. In Michigan, money subject to garnishment includes your paycheck, credit union and bank accounts, Michigan tax refunds, certain tax credits due from the state, and life insurance, if not payable to a spouse or child.
Types of Ganishment
Michigan allows for two types of garnishments; periodic and nonperiodic. A periodic garnishment is used for wages, rental income, land contract payments or any other payments made on a periodic basis. Nonperiodic garnishment is used to garnish bank accounts or other property. There is also an income tax return garnishment, which is used to garnish your Michigan state income tax refund. Your federal or city tax refund can't be garnished. Once your state refund is garnished, another garnishment writ must be obtained by the judgment creditor to get your next tax refund.
Time line Nonperiodic
For nonperiodic garnishments, the creditor must get the appropriate writ of garnishment and forward it to the garnishee, the entity that holds your money; your bank, for example. The garnishee must complete the form, which lists the amount of the debtor's money that it holds, and return it to the court within 14 days. It must then withhold the maximum amount allowed by law but does not forward it to the creditor for 28 days. This gives you the right to object to the garnishment. After the 28 days have expired, the garnishee must forward the money due to the creditor, unless the court instructs otherwise due to your objections. If the judgment is not yet satisfied, the creditor must return to court and repeat the process.
Time line Periodic
For a periodic payment garnishment, the process is the same, but the garnishment on your wages can continue for 91 days, or until the judgment is paid, whichever is sooner. If the judgment is not paid within the 91 days, the writ expires and the creditor must return to court and repeat the process. If you have other garnishments on your wages, when they complete, the next one begins.
Garnishment Amounts
The maximum amount of a wage garnishment is set by federal law at 25 percent of your income that exceeds 154.50 per week. Some states allow a smaller percentage, but Michigan is not one of them. Exempt from garnishment are city, state and federal taxes, required public pension payments and Social Security and medicare taxes. You can object to a nonperiodic garnishment if the funds in your bank account are only from Social Security, you filed for bankruptcy, it's barred by an installment payment order, the judgment was paid or the garnishment was not properly served.
0 comments:
Post a Comment