A wage garnishment is a procedure a creditor can use to collect an unpaid debt after suing you and obtaining a judgment from a county or district court. This procedure involves directing your employer to withhold a portion of your earnings and send the money to the court for payment against your judgment debt. Wage garnishment is not typically a viable means of debt recovery if you are unemployed.
Unemployment Income Exemption
While you are employed, a judgment creditor can typically take up to 25 percent of your disposable income, which is the amount you earn after taxes. Some states place additional restrictions on wage garnishment -- for example, if you are the head of household, Florida law prohibits garnishment of your wage earnings. Similarly, unemployment benefits are exempt from wage garnishment under federal law -- while you are unemployed, a judgment creditor cannot take your earnings.
Statute of Limitations
Each state sets a statute of limitations for money judgments -- for example, a judgment creditor can collect on a money judgment in Georgia for seven years after the date of entry. Your creditor may apply for a writ of garnishment to take part of your earnings at any time before the statute of limitations expires. This means that if you become employed within the statute of limitations mandated by your state, the creditor may begin garnishing your income.
Other Recovery
Even if your unemployment prohibits wage garnishment, a judgment creditor may use other methods to collect on a money judgment. It may garnish your bank accounts by ordering your bank to turn over nonexempt funds to the court for payment against your debt. A judgment creditor may also force the liquidation of personal property, subject to your state's laws, to pay your judgment debt. It may also place a lien on your real estate property, preventing you from selling or transferring your home or land until you satisfy the judgment.
Debtor's Examination
In most states, a judgment creditor may request a debtor's examination at any time before the statute of limitations expires. During a judgment examination, you must disclose all assets, expenses and income under oath. This process allows the judgment creditor to discover assets it may take or liquidate to satisfy your debt. However, a debtor's examination may also work in your favor -- if you are unemployed and have no assets, the court may consider you judgment-proof, which means that the creditor has no recourse for recovery until you become employed or obtain assets.
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