Just because a credit card company's headquarters are located in a different state does not mean they cannot garnish the wages you earn in Michigan. Credit card companies have to complete the proper legal process in Michigan before they can begin garnishing your wages. To begin this process, the credit card company usually hires a lawyer that practices in the state to file the lawsuit paperwork at your local county courthouse.
Lawsuit Objection
Once a credit card company files a lawsuit against you for an unpaid debt, you have the right to object to the suit. In Michigan, you have two weeks to file an objection with your local county courthouse. You should only consider filing an objection if your wages are exempt from garnishment or you currently have a wage garnishment that exceeds 25 percent of your disposable income. Federal law does not allow for the garnishment of specific types of income and 25 percent of your after-tax or disposable income is the maximum garnishment amount allowable by law.
Exempt Income
The specific types of wages exempt from garnishment are regular social security payments, unemployment benefit payments, military retirement pay, worker's compensation payments and retired state and federal employee benefits. If you earn regular wages, the amount that is equal to 30 times the federal minimum wage is also not subject to garnishment. To calculate this amount, you multiply the current federal minimum wage by 30. If you subtract this amount from your disposable income, the remainder of you paycheck is the amount that is subject to garnishment.
Installment Plans
Contacting the creditor listed on the lawsuit and working out a payment arrangement can prevent you from having a wage garnishment. You can also choose to work out a payment arrangement when you go to court. It is important to note however, that there are no laws in Michigan that force a credit card company to work out a payment arrangement with you. If you do not show up in court, the judge will enter a default judgment on behalf of the creditor and garnishments will begin shortly after.
Garnishment Expiration
A Request and Writ for Garnishment expires in 91 days in Michigan. This means the credit card company can garnish your wages for 91 days to attempt to collect the full amount of your outstanding balance. If the credit card company does not collect enough money to pay off your outstanding balance in that time, it has to file a new Request and Writ for Garnishment to continue the wage garnishment.
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