A creditor usually has the right to sue a debtor in court, so long as the statute of limitations on the collection of the debt has not expired. If he wins his case, the creditor will have much more power in collecting the debt than he did before. The creditor will, in many cases, be able to garnish a debtor's wage if he refuses to pay the amount owed the creditor from the suit.
In order to garnish a debtor's wages — that is, to seize a portion of his salary to pay off the debt — a creditor must gain the permission of a civil judge, usually the same judge who issued a ruling in the original debt case. When a judge does this, the creditor will show the order to the party paying the debtor, who will be legally mandated to do what the order tells him.
Exemption for Federal Benefits
However, a judge cannot usually issue a garnishment order for certain types of wages. Among these are nearly all types of federal benefits, including Social Security benefits, which are issued by the federal Social Security Administration. In most cases, a judge will refuse to garnish this source of income if a debtor is receiving it, as to do so would be a violation of federal law.
The garnishment of federal wages is not available to private creditors. In general, private creditors are not allowed to garnish any type of benefit provided by the government. Private creditors — which generally includes all creditors not affiliated with a government agency — can only garnish wages that are paid by a private employer. However, in a few cases, private creditors can garnish tax refunds.
However, if a person owes a debt to a government agency, then the agency may be able to garnish benefits paid by that same government. In the case of debts owed to the U.S. federal government, such as the Internal Revenue Service, the federal agency will usually be able to garnish federal benefits, such as Social Security checks. However, the debtor may be exempted if he is not making enough money to live without the government benefits.
Michael Wolfe has been writing and editing since 2005, with a background including both business and creative writing. He has worked as a reporter for a community newspaper in New York City and a federal policy newsletter in Washington, D.C. Wolfe holds a B.A. in art history and is a resident of Brooklyn, N.Y.