Garnishment is one of the tools available to a judgment creditor in Indiana for collecting on a judgment. The typical situation is for a judgment debtor to be employed and receive a fairly standard, weekly or bi-weekly paycheck. In that situation, a judgment creditor can usually get 25% of the debtor’s net pay (or the amount by which the net pay exceeds 30 * the federal minimum wage, whichever is less.) This is accomplished by getting a court order instructing the employer to withhold the appropriate amount from the debtor’s paycheck and send it to the clerk of the court who will in turn remit it to the judgment creditor.
In the past, a fair number of employers would avoid dealing with a garnishment by indicating that the individual was not, in fact, an employee, but was an independent contractor or indicating that the person didn’t receive a wage but, instead, worked on commission.
In 2007, the Indiana Court of Appeals seems to have closed these methods for an employer to avoid honoring a garnishment order. The case is Indiana Surgical Specialists v. Griffin (pdf). This case stands for the proposition that the nature of the earnings being passed from garnishee to judgment debtor, whether they be wages, salary, commission, or whatever, is not important. Similarly, the relationship between garnishee and judgment debtor as employee, independent contractor, or whatever is also not important. Rather, what is important is that there is compensation and that it’s paid from garnishee to judgment debtor periodically. If there are earnings paid periodically, they are subject to a garnishment order.
Leave a Reply