A wage garnishment allows a creditor to collect on a judgment against a debtor. Mortgage lenders in Florida must foreclose to get a judgment against the owner-debtor. The mortgage lender needs to specifically obtain a mortgage deficiency judgment to seek a wage garnishment from the owner-debtor. Florida and federal law provide certain exemptions from wage garnishment.
Mortgage Default
Mortgage lenders in Florida are required to file a judicial foreclosure procedure to seek relief on a defaulted mortgage. By successfully foreclosing, the lender can seize the property and sell it. If the property sells for less than the defaulted mortgage balance, the lender can seek to obtain a deficiency judgment for the difference. The debtor can legally challenge the request for a deficiency judgment by demonstrating to the court that the lender sold the foreclosed property for less than fair market value. If the the lender obtains the deficiency judgment, the lender can seek to collect on the judgment by garnishing the debtor's wages.
Wage Garnishment
Wage garnishment is legal in Florida, but is subject to exemptions found in federal and state law. The federal Fair Consumer Credit Act excludes all weekly net wages below 30 times the hourly minimum wage, and 75 percent of net wages above that amount are also exempt from garnishment relating to a mortgage debt. Net wages are considered to be all gross earnings less any legally required payroll deductions. The Act also protects the debtor from being fired due to the garnishment action. Florida state law provides 100-percent exemption from wage garnishment for certain debtors, as detailed below.
Head Of Family
Florida state law providers debtors who are considered a head of family a 100-percent exemption from wage garnishment. The law considers any person who provides over 50 percent of the financial support of a child or other dependent to be a head of family. The first $750 of net weekly earnings are fully exempt, and any earnings over that can be garnished only by the agreement of the debtor. Such an agreement must be in writing and conform to the law's specified form and language.
Other Provisions
A lender can seek a deficiency judgment for up to five years from the date of the foreclosure sale, and such judgment is valid for up to 20 years. The debtor challenging a request for a deficiency judgment is entitled to a legal hearing where he can present evidence regarding the value of the home at the time of the foreclosure sale. If the court agrees to that value and it is higher than the defaulted mortgage balance, no deficiency judgment will be given. The federal Act's exemption is based upon earnings after legal deductions such as taxes and FICA and does not include deductions for things such as medical insurance or retirement funds. If the debtor has filed for bankruptcy, a wage garnishment will not be instituted.
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