Wage Garnishment in Maine

The Pine Tree State allows residents to embrace nature’s finest qualities. As you try to enjoy life to the fullest, things can happen that disrupt your daily life. One way this can happen is if you fall behind on debt repayment and your wages become the target of a wage garnishment order. Wage garnishment can make paying your monthly bills like rent or your mortgage stressful and even burdensome. This article will explain how wage garnishment works in Maine and how you can minimize its effects.

What Is Wage Garnishment?

Wage garnishment allows a creditor to withhold funds directly from your paycheck. It’s often called an installment payment order in Maine. This is usually only possible with a court order. Creditors and debt collectors can’t garnish your wages in Maine until a court awards them a judgment. And to get a judgment, debt collectors must first sue you. If successful in this lawsuit, they become judgment creditors and can then ask the court for a wage garnishment order. Maine law regulates how a debtor’s wages are garnished in the Pine Tree State.

Who Can Garnish My Wages in Maine?

Any lender, creditor, debt collector, or debt trader can garnish your wages in Maine if they have a valid court judgment. State law governs wage garnishment for private debts like credit card debt. The statute of limitations in Maine for collecting a credit card debt is six years. 

Some special debts can be collected without a court order. The IRS or a federal student loan servicer doesn’t need a judgment or court order to garnish your wages if you have unpaid federal income taxes or delinquent student loans. Family support obligations like alimony and child support are also subject to special rules and don’t require a judgment before wage garnishment.

Most creditors are limited in how much they can take each payday. But in Maine, those limitations don’t apply to orders in support cases, orders in Chapter 13 bankruptcy cases, or debts due for state or federal income taxes. This article focuses on wage garnishment for private debts that require a court judgment. Private debts include consumer debts like credit card debts, personal loans, and other unsecured lines of credit.

Maine Wage Garnishment Process 

Creditors and their collection agencies must follow the procedures of Maine’s wage garnishment laws to successfully garnish your wages.

1. The debt collector files a lawsuit.

In Maine, a debt collector has to file a lawsuit seeking a judgment before it can garnish your wages. A debt collector that files a lawsuit must serve you with a complaint that alleges that you failed to repay the debt. If you don’t answer this complaint, the court will award the plaintiff in the case a default judgment.

2. A judgment creditor requests a disclosure hearing

If the court awards a judgment to the creditor, that creditor is then called a judgment creditor. As the losing party, you’re called a judgment debtor. In Maine, judgment creditors can request judgment debtors to appear at a hearing and testify about their ability to satisfy the judgment. This hearing takes place before a judge of the district court. If granted, the court will subpoena you to appear.

This hearing and any proceeding based on a consumer debt must be brought where the consumer transaction occurred or where the judgment debtor resides. Consumer debts are debts that are incurred for personal, family, or household purposes. 

The subpoena must contain: 

• The date and place where you are ordered to appear for the disclosure hearing. 

• An order to produce any documents requested by the judgment creditor.

• A warning that failure to obey the subpoena may result in your arrest, an order to your employer to withhold a portion of your wages, or both. 

• A notification that you are entitled to be heard on issues concerning your ability to pay the judgment and whether any of your income or assets are exempt from the court’s wage garnishment order.  

3. The court holds the disclosure hearing.

Unless you and the creditor can negotiate an agreement to make installment payments (and both parties sign it), you must appear for a hearing at the time and place listed in the subpoena to determine your ability to pay the judgment. You and the judgment creditor can subpoena witnesses to the disclosure hearing to give testimony about your ability to satisfy the judgment. If you need more time, the court may grant a continuance of the disclosure hearing for good cause.  

At this hearing, the court will determine the amount of the installment payments, if any, that you must make to the judgment creditor. The court can’t order you to make any installment payments if the only income you is from an exempt source under Maine law.  

At the hearing, you'll have to disclose your income, assets, and any other information that will help the judgment creditor enforce the judgment. Unless you fail to appear for the disclosure hearing, your testimony must be taken by the court before it issues an order to garnish your wages. As a judgment debtor, you must also sign an affidavit attesting to this information on a form provided by the district court.

4. The court makes a decision.

In Maine, courts have the power to determine when, where, and how a wage garnishment order is made. To determine the amount of your required installment payments, the court may consider:  

• Reasonable financial requirements for you and your dependents.   

• Any payments you’re required to make to satisfy other wage assignment orders.   

• Other judgment orders or wage assignments that have priority.

• The amount due on the judgment.

• The amount of money or earnings you receive or will receive.   

• Any other factors the court considers relevant. 

5. The court can terminate the disclosure hearing.

If the court is satisfied that a debtor has no earnings, property, or other assets available to satisfy the judgment, in whole or in part, the court can terminate the disclosure hearing. If the judgment creditor fails to appear at the time and date named in the subpoena, the disclosure hearing is terminated. If the judgment creditor dismisses or withdraws the disclosure subpoena after it has been served, this will also terminate the disclosure hearing. A terminated hearing is considered a completed hearing

How Much of My Paycheck Can Be Taken by Wage Garnishment?

In Maine, the total amount garnished from your wages can’t exceed the judgment plus interest and costs. Using the federal minimum wage as a guide, federal law limits the total amount of earnings that may be taken from your paycheck in a given workweek. Any wage garnishment withholding order applies only to your disposable earnings, which are the earnings that remain after all legally required deductions are withheld.

In Maine, the maximum amount of your disposable earnings a creditor can garnish is the lesser of:

• 25% of your disposable earnings for that week, or  

• The amount by which your disposable earnings for that week exceed 40 times the federal hourly minimum wage. The current federal minimum wage is $7.25 and 40 times that is $290. If you make $290 a week or less in disposable income, your wages can’t be garnished.

Say your weekly disposable income was $400. 

• 25% of $400 is $100.

• $400 exceeds $290 by $110.

• Since $100 is less than $110, the judgment creditor can only garnish up to $100 of your weekly earnings.

For each pay period, the garnishment amount is also limited by exemptions. In Maine, exemptions include:  

• Social Security benefits, unemployment compensation, or a local public assistance benefit    

• Veterans benefits   

• Disability, illness, or unemployment benefits   

• Alimony, support or separate maintenance, to the extent this is reasonably necessary for the support of the debtor and your dependents  

• Payments or accounts under a stock bonus, pension, profit-sharing, annuity, individual retirement account, or similar plan under Maine law

How To Stop a Garnishment in Maine

To stop wage garnishment in Maine, there are only two options. First, you can negotiate a settlement with the judgment creditor and pay the amount owed with a lump sum or installment payments. Second, you can file for bankruptcy.

When you file bankruptcy, the court issues an automatic stay, which stops most collections actions including wage garnishment. If your case is approved, many of your debts will be discharged, meaning creditors can’t pursue future garnishment on those debts. If you file, you’re allowed to keep any property that qualifies under Maine exemptions. Upsolve offers a free online tool that can help you file Chapter 7 bankruptcy without a lawyer. 

Are There Any Resources for People Facing Wage Garnishment in Maine?

The following organizations are some of the nonprofit legal aid and self-help resources available in Maine:

• Maine State Bar Association

• Pine Tree Legal Assistance

• Maine Volunteer Lawyers Project

• Cumberland Legal Aid Clinic