A wage garnishment order allows creditors to take money directly from your paycheck. Most of the time, this is only possible after a court has entered a judgment. Here's how Michigan regulates wage garnishments.
Written by Upsolve Team.
Updated October 21, 2021
Wage garnishment allows creditors to take money out of your paycheck when you stop making payments to the creditor. Every state, including Michigan, has a legal process that creditors need to follow if they want to garnish your wages.
Even though creditors have to follow the law, they sometimes don’t. If you’ve just been told a creditor in the Great Lake State is about to start garnishing your wages, it’s important to understand how the legal process works so that you can protect your rights.
What Is Wage Garnishment?
Wage garnishment is a form of debt collection where a creditor collects on an overdue debt taking money directly out of your paycheck. Generally speaking, wage garnishment happens when you stop making payments on a debt and the creditor decides to file a lawsuit against you. Through the lawsuit, the creditor will seek a judgment against you for the money owed.
They can either get a judgment by winning the lawsuit at trial or through a default judgment, where they win the suit because you didn’t show up to court. With the judgment, they’ll be able to ask for a garnishment order from a judge to garnish your wages. Though they are limited in how much they can take each pay period.
Although the process is similar in most states, they’re not all the same. Every state has its own laws, court rules, and limitations that creditors have to follow if they want to obtain a wage garnishment.
Who Can Garnish My Wages in Michigan?
Creditors, debt collectors, and debt buyers can garnish your wages, but they must have a valid judgment against you. The federal government can also garnish your wages to pay back unpaid federal taxes and defaulted federal student loans. Your wages can also be garnished if you owe child support. But neither the federal government nor parents who are owed child support need a court order to garnish your wages.
If you owe taxes to the state of Michigan, the Collection Services Bureau can take various actions to collect on these taxes, including garnishing your wages or taking money directly from your bank account without a court order.
This article focuses on wage garnishment for debts like credit card debt that require creditors to get a judgment against you to collect on the money you owe.
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Michigan Wage Garnishment Process
When a creditor wants to garnish your wages, the first thing they’ll do is file a collections lawsuit against you in court. This lawsuit will state that you owe the creditor money and need to pay them back. If you owe a creditor money, you have what’s called a debt obligation. If they win the lawsuit against you, the creditor will have a judgment.
Once the creditor obtains a court judgment against you, they need to wait 21 days. Then, they can file a Request and Writ for Garnishment. This document asks the court to give the creditor the power to garnish your wages. In this document, your employer will be called the garnishee and you will be called the debtor.
The court will then issue the writ by signing it. Once signed, the creditor has 182 days to give the writ to your employer using a special process called service. In addition to giving them the writ, the creditor will also provide a disclosure form and issue the disclosure fee, which is $35.00 for periodic garnishments.
Your employer has seven days to give you a copy of this writ and request. Then, they have 14 days to make a disclosure to the court, telling the court how much of your paycheck they’ll take each pay period.
The creditor has to give you a statement every six months to show you much of the debt has been paid off.
Objecting to a Wage Garnishment
As the debtor, you have 14 days from the date you receive notice of the garnishment to object. Reasons you may object to a wage garnishment include:
The writ was not issued properly.
The money to be garnished is exempt.
You’ve filed for bankruptcy.
You have a court-ordered installment plan.
You already paid the judgment.
The maximum amount of money that can be garnished by law is already being withheld by another court order.
To object, you will need to file an objection form with the court that issued the writ of garnishment. You can file an objection by using the Do-it-Yourself Objection to Garnishment tool. This tool will help you fill out your objection and file it with the appropriate court.
How Much of My Paycheck Can Be Taken by Wage Garnishment?
The total amount a creditor can garnish can’t exceed the judgment, plus fees, costs, and accrued interest. Creditors are also limited in the amount they can take from each paycheck. Michigan state law aligns with the federal law for garnishment limitations. Generally speaking, in Michigan, creditors can garnish the lesser of the following in any given workweek:
25% of your weekly disposable earnings (your gross wages minus legally required deductions like taxes and Social Security), or
The amount by which your income exceeds 30 times the federal minimum wage (currently $7.25 per hour).
For example, if you make $600 after all taxes and deductions, then you’ll have to determine which is lesser, 25% of $600 or the amount by which your disposable income exceeds 30 times the federal minimum wage:
25% of your disposable earnings would be $150 ($600 x .25 = $150).
30 times the federal minimum wage is $217.50. Your disposable earnings would exceed $217.50 by $382.50 ($600 - $217.50 = $382.50).
In this case, the maximum allowable garnishment would be $150.
The amount of your wages that can be garnished for back taxes, student loans, and child support follow different formulas. There are also some wage garnishment exemptions. Creditors are not allowed to take income that is exempt from garnishment. This includes income like Social Security benefits, unemployment or workers’ compensation benefits, Supplemental Security Income (SSI) payments, state disability assistance, payments from Individual Retirement Accounts (IRAs), and others.
How To Stop a Garnishment in Michigan
Aside from successfully objecting to the writ of garnishment, there are really only two ways to stop wage garnishment in Michigan. The first option is to pay the debt off, either in a lump-sum payment or by allowing the wage garnishments to continue until the debt is paid.
The second way to stop wage garnishment is by filing for bankruptcy. This is a good way to get debt relief if you're struggling to pay several debts. There are two types of bankruptcy you can file in Michigan: Chapter 7 and Chapter 13 bankruptcy. Which one you file for will depend on your eligibility and your goals. If you have a simple Chapter 7 case, you can use Upsolve’s free filing tool to help you file without an attorney. If your case is more complicated, Upsolve can help you find a free consultation with a qualified bankruptcy attorney.
Once you file for bankruptcy, your creditors will have to stop garnishing your wages at least while the bankruptcy is pending. That’s because the court will issue an automatic stay, which stops the garnishment and all other debt collection actions while your case is pending. Some creditors will lose their right to collect money from you because the debt owed to them will be discharged by bankruptcy.
Are There Any Resources for People Facing Wage Garnishment in Michigan?
In Michigan, people facing wage garnishment have resources available. To access resources, you can browse the Michigan State Bar’s Legal Resource and Referral Center.
You can also access legal resources through the Michigan Legal Help website, which is dedicated to coordinating legal assistance for civil legal issues. This website provides free legal information and self-help resources. It also has a Guide to Legal Help that can connect you with legal resources in your county, including legal aid organizations that can provide you with a lawyer. It’s a part of the Michigan Legal Help Program, which is dedicated to coordinating legal assistance for civil legal issues.