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You Didn't Respond to That Garnishment Request. Now What?

February 17, 2017

In 2015, Michigan revised its garnishment laws to make it easier for garnishees to avoid being defaulted and becoming liable for a judgment debtor's debt. If you're not familiar, garnishment is a procedure that allows a party who obtains a money judgment (the judgment creditor) against another party (the judgment debtor) to collect that money from a third party (the garnishee) who owes or has an obligation to pay money to the judgment debtor. In other words, if A gets a $10,000 judgment against B, and B is employed by C, garnishment lets A get his money from C rather than B because C has an obligation to pay money to B (wages).


The problem garnishees faced was that the old procedures made it easy for a judgment creditor to obtain a default judgment if the garnishee failed to meet deadlines required by the garnishment procedures. In essence, missing a deadline meant the garnishee could become primarily liable for the employee's debt and potentially lose the ability to make periodic payments withheld from the employee's wages, for example. The 2015 changes to the garnishment law, however, made it more difficult for creditors to obtain default judgments against garnishees.


Under the current law, for periodic garnishments, if a garnishee fails to provide the garnishee's disclosure or do another required act within 14 days, the creditor must send a notice of failure to the garnishee before seeking a default. The garnishee will then have 28 days from service of the notice advise the judgment creditor and the employee that withholdings will immediately begin or the failure will be cured. If that deadline is missed, the judgment creditor can then ask the court to enter a default against the garnishee. This added steps gives garnishees time to avoid having to answer for the employee's debt directly from its own bank account. While the best course of action is to comply with the garnishment timelines, if a date is missed by a few days, the result may not always be catastrophic, but responding quickly is key. 




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