Definition
Garnishment is an American legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant. Garnishment allows the plaintiff to take the money or property of the debtor from the person or institution that holds that property. A similar legal mechanism called execution allows the seizure of money or property held directly by the debtor.
Garnishment
What is ‘Garnishment’
A legal process whereby payments towards a debt owed by an individual can be paid by a third party – which holds money or property that is due to the individual – directly to the creditor. The third party in such a case is generally the individual’s employer and is known as the garnishee. Garnishments are typically used for debts such as unpaid taxes, monetary fines and child support payments.
Explaining ‘Garnishment’
For example, if John Smith owes $10,000 in unpaid taxes that have been overdue, the IRS can resort to garnishment of his wages. The IRS would then direct Smith’s employer to remit a portion of his salary for a certain amount of time, until Smith has paid off his taxes in full. Garnishments can have a negative impact on one’s credit rating.
Further Reading
- 'Empty, swept and garnished': the public finance initiative case of Throckley Middle School – www.tandfonline.com [PDF]
- Squandering the Gain: Garnishing and the Continuing Dilemma of Physician Financial Incentives – heinonline.org [PDF]
- Bankruptcy and state collections: The case of the missing garnishments – heinonline.org [PDF]
- Factors of garnishing across the border investments – www.econstor.eu [PDF]
- The effect of garnishee orders on the personnel of the Department of Health, South Africa – www.tandfonline.com [PDF]
- The Effect of the Garnishment Provisions of the Consumer Protection Act Upon State Garnishment Laws – heinonline.org [PDF]
- Abolition of Wage Garnishment – heinonline.org [PDF]
- Getting out of debt: Garnishment of wage in whose interest? – link.springer.com [PDF]
- The law and economics of consumer finance – academic.oup.com [PDF]
- Prevalence and characteristics of Virginia hospitals suing patients and garnishing wages for unpaid medical bills – jamanetwork.com [PDF]
