One of the more interesting aspects of what we do here at Judgment Collectors is the differences between state laws. For example, we can assist with money judgments in Michigan. The Wolverine State has an interesting approach to garnishment. For the record, garnishment is one way to collect a money judgment in Michigan.
In most states, garnishment works in one of two ways:
- Wage Garnishment – Wage garnishment allows a judgment creditor to take a certain portion of the debtor’s wages with every paycheck. It is usually a percentage of the debtor’s disposable income.
- Bank Garnishment – Bank garnishment allows a judgment creditor to take a certain portion of a debtor’s banked funds. Money can typically be taken from both checking and savings accounts.
Garnishment in Michigan still relies on wages and banked assets. But the state takes a slightly different approach. The two types of garnishments allowed in Michigan are known as periodic and non-periodic garnishments. Let’s look at both in a little more detail.
The Periodic Garnishment
A periodic garnishment allows a judgment creditor to take money from a source that pays the debtor periodically. Obviously, wages immediately come to mind. Anyone with a job gets paid on a regular schedule. It could be weekly, bi-weekly, semi-monthly, or even monthly. But other sources of periodic income are also on the table in Michigan. They include:
- Rental income
- Pension and retirement plans
- Commissions and bonuses
- Invoice income
Certain types of periodic income are exempt in Michigan. They include things like Social Security and disability payments. Also know that writs of garnishment against periodic income do not expire. They remain in force until the entire debt associated with them is paid.
The Non-Periodic Garnishment
As its name implies, the non-periodic garnishment is applied against financial resources that are not considered regular income. Balances in savings and checking accounts are the most common examples. But they aren’t the only possibility. A non-periodic garnishment could be executed in the form of a tax garnishment. In other words, the judgment creditor garnishes the debtor’s tax refund.
Non-periodic garnishments can be exercised against:
- Certain types of securities
- Unclaimed property
- Other types of assets as determined by a court
The most important thing to note about non-periodic garnishments is that they are one-off legal tools. Imagine a judgment creditor getting a writ of garnishment against a debtor’s bank account. Money can be seized from that bank account only once. Following the initial seizure, the writ expires. The judgment creditor would have to request a new writ to seize banked funds in the future.
There Are Rules in Place
Despite garnishment allowing a judgment creditor to forcibly take financial resources from a debtor, there are rules in place to protect debtors. Let’s go back to garnishing a debtor’s wages. First and foremost, a debtor’s entire paycheck is not up for grabs. Only their disposable income is exposed.
Even at that, creditors can only take a certain portion of that income. This is one reason garnishment is considered among the least attractive means of collecting judgments in Michigan. On a sizable debt of tens of thousands of dollars, it could take a lifetime to collect with garnishment alone.
If you would like to know more about your options for collecting a Michigan money judgment, we can help. Judgment Collectors specializes in money judgments. It’s all we do. Best of all, we work on consignment. We cover all our own costs throughout the collection process. You don’t pay us until we collect on your behalf. And if we collect nothing, you pay nothing.