Bankruptcy Law Research Guide:
A garnishment action allows a party who has obtained a money judgment (including an order of support) against a debtor to collect the money directly from a third party such an employer or bank. A court order for garnishment is also called a writ of garnishment.
There are two types of garnishments in Arizona. One type allows a creditor to garnish wages from an employer (A.R.S. § 12-1598.03) and the other allows a creditor to garnish money or other property held by a third party, such as a bank. (A.R.S. § 12-1572).
Arizona law provides terms for the three different parties to a garnishment in A.R.S. § 12-1570 et seq.:
- The party who gets a money judgment in court against a debtor and who applies to the court for the writ of garnishment is called a judgment creditor.
- The party who owes money to the judgment creditor is called the judgment debtor.
- The third party who controls the debtor’s property (such as an employer or bank) is called the garnishee.
What happens when a creditor applies for a writ of garnishment?
The judgment debtor receives notice from the judgment creditor. The judgment creditor must deliver to the judgment debtor a copy of the writ and the initial notice and request for hearing form within three days after service of the summons and writ of garnishment on the garnishee. A.R.S. § 12-1598.04.
The judgment debtor receives notice from the garnishee instead of the judgment creditor. Once a garnishee (bank or property holder) is served with notice of the garnishment, the garnishee must deliver a copy of the summons and writ of garnishment, a copy of the underlying judgment, and the notice and request for hearing form to the debtor within three days. A.R.S. § 12-1574.
What can I do to stop the garnishment?
Object to the garnishment and request a hearing
For a wage garnishment, any party can file a written objection and a request for a hearing. A party can object to the garnishment, the answer of the garnishee, or the nonexempt earning statement within 10 days after receipt of the answer or the nonexempt earnings statement. A.R.S. § 12-1598.07(A). The objector must state the grounds for the objection. A.R.S. § 12-1598.07(C). The judgment debtor will receive a copy of the objection/request for hearing form from the judgment creditor. However, the court, justice of the peace, or city or town magistrate will also supply the judgment debtor with a notice a garnishment and a objection/request for a hearing form for free. Additionally, the form is contained in A.R.S. § 12-1598.16.
The procedure is similar for non-wage garnishments. For a wage garnishment, any party can file a written objection and request for a hearing. A party can object to the garnishment, the answer of the garnishee, or the nonexempt earning statement within 10 days after receipt of the answer or the nonexempt earnings statement. A.R.S. § 12-1580(A). The objector must state the grounds for the objection. A.R.S. § 12-1580(C). The judgment debtor will receive a copy of the objection/request for hearing form from the judgment creditor. However, the court, justice of the peace, or city or town magistrate will also supply the judgment debtor with a notice a garnishment and a objection/request for a hearing form for free. Additionally, the form is contained in A.R.S. § 12-1596.
Work out a payment arrangement with the judgment creditor
It might be possible to halt the garnishment by contacting the judgment creditor and working out an alternative payment arrangement. However, the creditor is under no obligation to discuss or accept alternative arrangements.
Filing for bankruptcy invokes an automatic stay that stops most collection efforts including garnishments. 11 U.S.C § 362. Creditors are prevented from taking any actions to collect debts until the stay is lifted by the bankruptcy court. See the Bankruptcy page for more information.
Are there limitations on what can be garnished?
Exempt earnings are not subject to garnishment. According to A.R.S. § 12-1598, exempt earnings are those which are not subject to judicial process (including garnishment) according to federal and state law.
15 U.S.C. § 1673 is one such statute that restricts the amount that can be garnished. The maximum amount that can be garnished cannot exceed the lesser of:
- 25 per centum of disposable earnings for that week, or
- the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of Title 29 in effect at the time the earnings are payable 15 U.S.C. § 1673, whichever is less.
A variety of limitations are placed on non-wage garnishments.
The statutory exemptions for non-wage garnishments pursuant to A.R.S. § 12-1596(C) include:
- One hundred fifty dollars ($150.00) in a bank, savings and loan association or credit union account (Three hundred dollars ($300.00) for married account holders);
- Temporary assistance for needy families;
- Supplemental Security Income (SSI);
- Social Security benefits (SSA);
- Veterans’ Administration benefits (VA);
- Certain pension benefits and retirement funds;
- Workers’ Compensation benefits; and
- Some insurance proceeds.
Further, the statutory exemptions pursuant to A.R.S. § 12-1596(C) include:
- Household goods, furniture and appliances;
- Up to one thousand five hundred dollars ($1,500.00) equity value for each owner of a car or truck (Three thousand dollars ($3,000.00) equity value if the owner is physically handicapped);
- Wearing apparel, musical instruments, televisions or stereos and other personal items;
- Tools and equipment used in a commercial activity, trade, business or profession.
Page Updated: 6 November 2008