Today the Indiana Court of Appeals issued an opinion in the case of Miller v. Owens concerning the interaction between child support wage withholdings and garnishments to enforce civil judgments.
I was, frankly, surprised to see the case because it reflected the understanding I’ve had and the prevailing practice in all of the courts in which I’ve practiced. When a creditor gets a judgment against a debtor, Indiana law allows the judgment creditor to enforce the judgment by garnishing the wages of the judgment debtor. But, there is a limit – the creditor can’t take everything. Essentially, the creditor is entitled to 25% after taxes and other required withholdings (Social Security but not something voluntary like insurance or 401(k)).
However, child support can take out a lot more; up to 60% in some cases. Here is the twist, relevant to this case. A child support order takes priority over a regular garnishment. And, if the child support takes out in excess of 25% of the judgment debtor’s wages, the creditor is not entitled to anything from its garnishment. I had figured this to be pretty well settled; and I guess the Court of Appeals agreed. But, in this case, at least; the judgment creditor had persuaded a Miami County judge that the judgment creditor could get up to 25% from the garnishment so long as the child support plus the garnishment didn’t exceed the higher 50% applicable to child support orders.
That garnishment structure stood, apparently, for the better part of a decade until, after a series of job changes, one of the employers directed to make a withholding fought the order, got the trial court to reverse its interpretation, and had the Court of Appeals agree with that decision.
Also, too, the case had discussion of the “law of the case” doctrine (not binding on the trial court unless affirmed by the court of appeals); and “offensive collateral estoppel” (not deemed applicable in this case.) Lots of procedural goodness.
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