We recently published a post describing the legal options a judgment creditor in Michigan has for collecting a judgment. Those options include garnishment. In a broad sense, garnishment is the process of taking a portion of a judgment debtor’s income or financial assets to pay their debt. Garnishment in Michigan can be either periodic or non-periodic.
We put this post together to describe the two types of garnishment and how they work. As you read, keep in mind that Judgment Collectors handles Michigan cases. If you are looking to collect an outstanding judgment in the Great Lakes State, we would be happy to take a look and let you know how we can help.
Periodic Garnishment
Periodic garnishment is so named because the judgment creditor is taking money from the debtor on a periodic basis. In most cases, periodic garnishment happens by way of the judgment debtor’s wages. A garnishment order is signed and delivered to the debtor’s employer. The employer is then compelled to withhold a certain amount from the debtor’s paycheck and forward it to the creditor or its representative.
A couple of things to note about periodic garnishment:
- It can continue until the judgment amount, interest, and fees are paid in full.
- A new court order can force periodic garnishment to cease.
- Periodic garnishment can be applied to payments, land contract payments, and other types of debts treated as income.
The downside to periodic garnishment is that creditors do not tend to get a lot of money in short order. This form of collection is a long-term strategy. It could take years to pay off a sizable debt through periodic garnishment.
Non-Periodic Garnishment
Non-periodic garnishment takes its name from the fact that it is a one-off transaction. It is utilized to garnish banked financial assets, in most cases. A garnishment order is delivered to the debtor’s bank, whereupon the bank is compelled to seize the assets for payment of the debt.
Once the assets are seized and forwarded, the garnishment order is no longer in force. A single non-periodic garnishment order cannot be enforced multiple times. Therefore, a Michigan judgment creditor who wished to seize bank assets in the future would have to ask for a new garnishment order.
Banked financial assets are not the only assets that can be garnished with a non-periodic order. Michigan law allows for certain other types of assets. To learn what those assets are, it is best to contact an attorney.
Income Tax Intercept
There is a third type of garnishment allowable by Michigan law, though it is not actually called garnishment. It is known as the income tax intercept. Under this court ordered action, a judgment debtor’s income tax refund can be intercepted and forwarded to the judgment creditor. Income tax intercepts are managed by the state Department of the Treasury.
As with a non-periodic garnishment, the income tax intercept is a one-off deal. A judgment creditor would have to request it year-after-year if such a strategy were desirable.
You Have Other Options
As a judgment creditor in Michigan, you do have options outside of garnishment. Your attorney can provide all the details as needed. If you don’t have an attorney or you would rather bring in someone else to help with judgment collection, we invite you to contact Judgment Collectors.
We work on consignment, meaning that you don’t pay a dime toward collection after turning your case over to us. We only get paid if and when we collect. If this sounds like a good deal to you, reach out so we can talk about your case.