8.3 GARNISHMENT
8.301 In General.
While the property execution is an important collection tool, in part because it serves as an effective means of forcing a debtor to contact the attorney, the most common and the most effective execution on a judgment is the garnishment, particularly the wage garnishment. Garnishment is the process by which the creditor enforces its lien of the writ of fieri facias against intangible property. However, the garnishment process is not a writ. It is a three-party lawsuit, an action in which the judgment creditor attempts to step into the shoes of the judgment debtor in order to enforce a chose in action against a third party—the garnishee.
The wage garnishment is effective because as soon as it is served upon the debtor's employer, the employer ceases paying the judgment debtor's full wage and instead pays only the portion exempt from garnishment pursuant to section 34-29 of the Virginia Code. The employer generally notifies the employee of the garnishment as soon as it has been served on the employer. Garnishments are inconvenient to the employer and expensive to the employee. They often affect the working relationship between the debtor and his or her employer, although an employer cannot discharge an employee because of a single garnishment or because of successive garnishments by a single creditor. They invariably result in a smaller paycheck, about 25 percent smaller in the case of a debtor who makes a substantial amount above the statutory exemptions. They are reported to the credit bureau and are an embarrassment to the judgment debtor. For all of these reasons, garnishment or the threat of garnishment is very effective in dealing with resistant wage earner debtors.
8.302 Prerequisites to Filing.
In order to garnishee a judgment debtor's wages successfully, a creditor needs three things. First, the creditor must have a valid judgment. Second, the creditor must know the debtor's place of employment. Finally, the creditor must pay the statutory court costs. 1150 Section 16.1-69.48:2 sets the fee at $36 "for all court and magistrate services in each distress, detinue, interrogatory summons, unlawful detainer, civil warrant, notice of motion, garnishment, attachment issued, or other civil proceeding," to which may be added optional fees charged by some localities. This does not include the service of process. Checking with the court clerk or the online fee calculator will yield information as to the total fee for a given case type and jurisdiction.
Since there are two defendants, each must be served at a cost of $12 per service. In addition, the Executive Office of the Supreme Court of Virginia has determined that the fieri facias on the garnishment form is a separate document to be served on each defendant, so the clerks' offices have been instructed to charge an additional $12 for each paper. Thus, if the sheriff is used, the cost of filing a garnishment is about $90. This increase, coupled with the decrease in the wage amount subject to garnishment, 1151 will result in fewer garnishments against debtors with marginal incomes and will increase the clients' cost.
Practice tip: If possible, counsel should use a special process server rather than the sheriff for service of garnishments. Most servers, other than the sheriffs' offices, do not generally charge this additional fee.
In addition, garnishments of wages of members of the armed services and civilian defense workers are subject to an additional administrative fee of $75 per garnishment order under Defense Department regulations.
Armed with the above, the creditor can hold up to 25 percent of the judgment debtor's disposable earnings for up to 180 days. At the end of that time, the money is paid into court to be distributed to the creditor or the creditor's attorney or, as a last resort, to be collected by the sheriff. All of this takes place with no further charge to the creditor.
8.303 Initiation of Garnishment.
Section 8.01-511 of the Virginia Code defines garnishment as a suggestion, not a writ. A judgment creditor need only suggest to the court in which the judgment was rendered that, by reason of the lien of the creditor's writ of fieri facias, there is liability upon a person other than the judgment debtor, including the personal representative of a decedent, to pay a sum of money to the judgment debtor. 1152 The court then issues a summons in the form described in section 8.01-512.3 of the Virginia Code. The summons must (i) be directed to only one garnishee for the garnishment of only one judgment debtor; (ii) contain the "Total Balance Due"; (iii) set forth the debtor's Social Security number or, in lieu thereof, a representation by the judgment creditor that he or she has made a diligent, good faith effort to secure the debtor's SSN but has been unable to do so; and (iv) specify that it is a garnishment against the debtor's wages or other compensation or against some other property of, or debt due to, the debtor. 1153 The garnishee is not liable to the judgment creditor for any property not specified in the summons.
The summons is served on the judgment debtor and the person (including corporations or other legal entities) in whose hands the creditor has suggested that there is money or other intangible property belonging to the judgment debtor. General District Court Form DC-451 1154 is served on the employer and sets out the employer's liability. The summons must actually be served on the garnishee and upon the judgment debtor, if possible. The creditor must provide in the suggestion the last known address of the judgment debtor and a stamped envelope pre-addressed with the debtor's address. The clerk must include in the envelope the garnishment summons and notice and claim for exemption form provided for in section 8.01-512.4 of the Virginia Code 1155 and give it to the sheriff with the service copy. The sheriff, after serving the co-defendant, will mail the envelope. This process constitutes good service on the debtor, even if the debtor is not actually served by one of the other methods prescribed by law.
If the judgment debtor believes that the garnishment proceeds are exempt from execution and notifies the court, he or she must be given a hearing within seven days. At the hearing, the debtor will be given an opportunity to show why the garnishment should be dismissed. In addition to the federal and state exemptions provided, a debtor may obtain relief from garnishment by claiming a homestead exemption pursuant to section 34-4 of the Virginia Code and also may claim additional protection for each child who resides with and is supported by the debtor if a wage garnishment is filed. 1156 If possible, the creditor must also furnish the debtor's Social Security number, which will appear on the summons. In addition to the above, the suggestion must contain other information, including the amount of interest claimed by the judgment creditor, calculated until the return of the summons, and any credits by way of payment or execution received by the judgment creditor since the date of the judgment. Additionally, one of six statutory allegations set forth in the section must be made in the suggestion of garnishment. General District Court Form DC-450 1157 can be used to initiate the garnishment suggestion, as can any other form that contains all of the necessary information.
All costs that are incurred by the judgment creditor after entry of the judgment in aid of execution of the judgment and paid to a clerk of court, sheriff, or process server are chargeable against the judgment debtor. 1158 Regardless of the actual amount of the fee paid by the judgment creditor for service of process, however, the service fee chargeable against the judgment debtor cannot exceed the fee authorized for service if made by the sheriff. Any previous costs that were chargeable against the judgment debtor may also be included by the judgment creditor as judgment costs in the garnishment summons form prescribed in section 8.01-512.3.
Timing of the suggestion of garnishment is important. When the creditor's attorney learns that the debtor has recently received, or is about to receive, a substantial amount of money, he or she should file the garnishment soon enough to prevent the funds from being depleted but not so early that the debtor has time to put the funds out of reach. Proper timing of the garnishment requires that the attorney know as much as possible about the debtor.
If the debtor is a landlord and the attorney knows where the debtor banks, the bank account should be garnisheed about the sixth of the month, when the tenants' checks are being deposited but before mortgage payments and checks for repair and maintenance expenses have been sent out.
State employees are paid on the first and fifteenth of each month, and almost all of them are required to have their salary deposited directly into a bank account. Therefore, garnishment of a state employee's wages should be served on the bank a few days before the next payday. This will ensure that the maximum amount of the first check deposited during the garnishment is reached. Lump sum payments to employees provide a special garnishment opportunity. In 2002, when state employees received a bonus in lieu of a raise, alert creditors were able to realize a substantial windfall by filing their garnishments in time to catch that payment.
If the debtor is entitled to receive an inheritance or bequest from an estate, the creditor's attorney should serve the garnishment on the executor or administrator before the funds are disbursed to the debtor. In this situation, a notice of lien of fieri facias 1159 may be used, but the attorney must be prepared to extend the lien, if necessary, beyond the one-year statutory limitation period or file the garnishment before the expiration of that period. Section 8.01-518 of the Virginia Code governs the service of garnishments on executors or...
