Posted on January 24, 2012 by Jonathan Alper

Florida Head Of Household Fortunate To Avoid Garnishment Of Wages From Washington Employer

 A man called me seeking help with a wage garnishment instituted by a former business partner who had obtained a Florida money judgment related to their prior business relationship. The man lived and worked in Florida. He supported his non-working spouse and minor children. He was employed by a company based in Washington state. The company had an office in Florida. The employer issued paychecks from the Washington office.  

The creditor domesticated the judgment in Washington, and he obtained a writ of wage garnishment which he served on the employer’s home office in Washington. The employer initially garnished the debtor’s pay check, but the debtor was able to convince a Washington state judge to dissolve the garnishment writ  because the debtor’s wages were exempt under Florida law.  
 
The creditor persevered and served a series of additional wage garnishments upon the employer, and in each instance the debtor got the employer to ignore the garnishment or a court to dissolve the writ. . The debtor asked me what he could do to stop what he believed was collection by harassment. 
 

 There are several legal decisions in various states which hold that debtors cannot export Florida exemptions to foreign states. I do not know if there is a consistent ruling in the state of Washington, but if Washington state law is consistent with other states then the local court should not be required to  recognize Florida’s head of household exemption. If the employer paid the debtor from its Florida branch office the debtor probably could assert the head of household exemption in a Florida court. 

 As a practical matter, if the Washington judge has dissolved more than one attempted wage garnishment based upon the Florida statute exemption, and the creditor continues to serve garnishment writs upon the employer in Washington, the debtor should consider filing a separate lawsuit for wrongful garnishment in Washington. 
 
This debtor may be fortunate that both his creditor and a foreign state judge does not understand that Florida’s exemptions are not enforceable outside of Florida. In general, a Florida debtor does not necessarily lose Florida residency when he takes a job in another state, but he may expose his wages to garnishment were he works. 
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Posted on December 7, 2011 by Jonathan Alper

Florida Wage Garnishment Exemption Is Good, But Not The Best

Florida statutes provide unlimited protection against wage garnishment when the debtor is head of household. This protection is very broad and effective, but some states have even better wage protection. Four states- North Carolina, South Carolina, Texas, and Pennsylvania- do not allow wage garnishment to enforce a commercial debt regardless of whether the debtor is head of household. I do not know if courts have carved out any exceptions from what appears to be an unqualified prohibition against wage garnishment in these four states. I do know that many Florida debtors, including most unmarried debtors and some business owners, are vulnerable to continuing wage garnishment up to 25% of their take-home pay.

Many of my clients consider moving to Florida because they believe we have the best debtor protection laws. Those people should thoroughly investigate the exemptions of their home states before deciding to flee to Florida. You may be better off to stay where you are. 
 

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Posted on June 7, 2011 by Jonathan Alper

Head Of Household Wage Exemption Liberalized By Court Decision

It is easier for debtor’s to assert  head of household exemption from wage garnishment after a ruling by a Florida court. I read about this decision on the Florida Collection Law Blog edited by Jorge Abril. Mr. Abril’s blog post explains that under Florida statutes once a debtor asserts that his wages are exempt from garnishment because he is head of household a creditor has only two days to file with the court an affidavit denying the exemption. In the past, the creditor’s attorney would sign the affidavit on behalf of his client.

The appellate court said that the creditor attorney may not submit the denial affidavit on behalf of the creditor. The affidavit must be signed by the creditor. Mr. Abil writes that, “As a practical matter, given the strict time constraints for filing the sworn denial - 2 days - the requirements imposed by this case will make it difficult for the attorney who represents a hard to reach client to defeat a claim of head of household exemption [regardless of the claim's merit.”

From the debtor’s prospective a debtor may be able to defeat a wage garnishment simply by submitting an affidavit of head of household. Another practical matter: the debtor’s attorney should not advise his client to submit a head of household affidavit the attorney knows, or has reason to suspect, is not true. The debtor attorney should do nothing more than inform his client of the laws and the applicable procedures.
 

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Posted on April 11, 2010 by Jonathan Alper

Is Florida Head Of Household Protected Against Wage Garnishment Served Upon Georgia Employer?

I received an interesting email question about wage garnishment issued outside of Florida against a Florida resident. The questioner resides in Florida and works for a Georgia company at its Florida office. The questioner has a civil judgment entered against him in Florida. The questioner’s pay check is issued by the employer’s payroll office located in Georgia. He is married and is head of household under Florida law. He asks whether his wages would be garnished if the creditor domesticates the judgment in Georgia and serves a writ of garnishment against his employer at the Georgia headquarters.

This debtor is entitled to Florida’s exemption against wage garnishment as long as he permanently resides in Florida. If the employer has a Florida office, which question implies it does, then the creditor will cause the Florida court which issued the judgment to serve the employer at its Florida office. A Florida court should dissolve the garnishment. If the employer did not have a Florida office then the creditor might transfer the judgment to Georgia and serve the writ in Georgia. The debtor could assert his Florida exemption in a Georgia court.

The debtor’s wage garnishment protection is determined by his residence and not where the creditor serves the writ of garnishment on the employer.

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Posted on February 21, 2010 by Jonathan Alper

Wage Garnishment As Effective Collection Tool: Attorney Expresses Contrary Opinion

There was a recent post about a conversation with a debt collection attorney concerning what he believed were, and were not, effective collection tools. I reported that this collection attorney did not find wage garnishment to be a good collection tool because wage garnishment often drove debtors into bankruptcy.

I received different opinion from another experienced collection attorney from the Tampa area who writes:

"I couldn’t disagree more with whomever disparaged wage garnishments.　They are my number one collection tool in this economy.　 With jobs scarce, people cannot afford to quit and seek new employment which they would have done prior to the recession.　I can usually stipulate most every contested wage garnishment or win evidentiary hearings on the head of household issue due to the difficulty in actually proving it. 　Furthermore, it is far easier to verify employment(thus ensuring a "hit") verses a bank account which is hit or miss.　I have no found bankruptcy to be an issue at all."

 This attorney's  opinion is consistent with my own experiences in bankruptcy practice. I have a few bankruptcy clients who say they are filing bankruptcy because their wages have been garnished, but I don’t find that wage garnishment is a primary cause of bankruptcy. Most bankruptcy debtors I deal with anticipate collection. In other words, most people file bankruptcy before a creditor gets a judgment which would subject their wages to garnishment. If a creditor attorney garnishes wages then in most cases the debtor cannot file Chapter 7 bankruptcy for one reason or another.

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Posted on February 15, 2010 by Jonathan Alper

Wage Garnishment Exemption Asserted By Both Spouses: Can There Be Two Heads Of Household In One Family?

A husband and his wife are jointly liable on a real estate bank loan and could not afford to continue payments. After they stopped making monthly payments the bank  sued both spouses to collect the full loan balance. Both spouses worked and were concerned that the bank would garnish their wages after getting a judgment.

In Florida, a judgment creditor cannot garnish wages of a debtor who is head of household. In a traditional family setting only one spouse can be head of household where there are minor children. The general rule is that the higher earning spouse provides the majority of support for the children and is head of household, and the lesser earning spouse is vulnerable to wage garnishment. In this particular case, both spouses thought they were head of household in their family.

The facts in this case were unusual. Theirs was a second marriage. Each spouse had children from a prior marriage. Because they worked at jobs in different Florida  cities each spouse lived in their own house  with one or more of their own children. Each spouse supported their respective children in their homes. Each spouse owned their own home individually. Each spouse contended that they should be head of household and exempt from wage garnishment. Can there be two heads of household, exempt from wage garnishment, in the same family?

I think that each spouse should be able to exempt their own wages from garnishment in this situation. Florida law is that to be exempt from wage garnishment the debtor must be the primary source of financial support for someone to whom he has a legal or moral obligation. The exemption statute does not limit the qualifying heads of household in one family. Florida courts have held that two spouses living in separately owned and occupied homes each can claim their own home as their exempt homestead provided that each spouse actually uses in their own home as their primary residence. Similarly, I think two spouses can be head of household if they each serve as the primary source of financial support for a different qualifying dependent.
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