HB 1240 – Garnishment of Once and Future Employees

Rep. Hamm (1-800-382-9841) has introduced HB 1240 concerning garnishments. Currently if a judgment creditor gets a garnishment order against a debtor’s wages with a particular employer, it remains in place until the judgment is satisfied. If the employee leaves the place of employment, there will be no wages to garnish, but the order remains in place. If the employee returns, the order remains in place and, so, the garnishment should resume.

Under this bill, if the employee leaves employment (for an unspecified period of time), the employer would not be required to resume the garnishment. The judgment creditor would be required to go back to court and get a new order.

This would be a great tool for debtors to avoid paying their debts. The nature of the economy is such that, I would guess, those subject to garnishment orders are more likely than average to work in a job that is seasonal, is more prone to layoffs, and/or is subject to gaps of some sort. Employers who don’t want the administrative hassle of a garnishment order and employees who would prefer to keep their money instead of paying their debts wouldn’t have any trouble arranging a gap in employment that could be relatively short.

The way these things usually work, I would envision that the garnishment stops. It takes a couple of weeks before the creditor can confirm that this is a termination of employment rather than something else; a month or two before the creditor can get the debtor served and back into court; maybe another month or two if the debtor doesn’t show up at the court date & the court gives the debtor a second chance; and then some time to get the order issued and processed by the employer and money to start flowing again. Even working relatively quickly as these things go, the creditor is going to miss out on a lot of garnishable wages to which it would currently be entitled and is going to use up judicial resources in the process.

I’d be more supportive of this proposal if there were a substantial period of non-employment involved – say, if the employee was gone for 2 or 3 years.