Wage Garnishment in Montana

You may choose to live in Montana because you want a peaceful life. One thing that can interfere with your daily life is a wage garnishment order. This sudden loss of disposable income can cause many financial problems and put you even further behind on paying your other bills, including your rent or mortgage. This article will answer some common questions about how wage garnishment works in Big Sky Country and what you can do to stop it.  

What Is Wage Garnishment?

Wage garnishment happens when a court orders your employer to withhold some of your earnings for payment of a debt. In Montana, only judgment creditors are legally allowed to garnish your wages under state law. A judgment creditor is a party that has successfully sued you and been awarded a judgment by the court. Creditors are limited by state and federal law in how much they can take from your paycheck. 

Montana follows federal wage garnishment guidelines. While some Montana statutes cover certain aspects of a wage garnishment, Montana defers to federal law on garnishing wages for debts like past-due taxes, student loans, and family support obligations. As a result, it also uses the same definitions of earnings, disposable earnings, and garnishment as federal law. 

Who Can Garnish My Wages in Montana?

Any creditor, debt collector, or third-party debt buyer with a valid court judgment and writ of execution can garnish your wages in Montana. Certain types of debts have special wage garnishment rules and don’t require a court order. These include federal tax debts, delinquent or defaulted student loans, and family support obligations like alimony and child support. Creditors like the IRS, federal student loan servicers, and state agencies don’t need a court order or a judgment to garnish wages for these types of debts. 

This article focuses on wage garnishment for non-special consumer credit debts that can only happen after a judgment.

Montana Wage Garnishment Process 

The wage garnishment process in Montana starts with a lawsuit. If a debt collector wins this lawsuit it’s called a judgment creditor, and you’ll be called the judgment debtor. The judgment creditor can obtain a writ of execution and garnish your wages. But you can request a hearing to claim exemptions that protect your earnings from garnishment.

1. A debt collector files a lawsuit and gets a judgment.

In Montana, when a party has a court judgment for money as a judgment creditor, it may enforce the judgment with a writ of execution. First, it must file a lawsuit and win. You must answer this lawsuit or the court will award a default judgment to the party that filed the lawsuit. If the judgment creditor wins the lawsuit, it can have a writ of execution issued to enforce the judgment. This can happen at any time within 10 years of the judgment being issued. A writ of execution can’t be used to garnish other sources of income like Social Security and unemployment compensation.

2. The judgment creditor gets a writ of execution.

The judgment creditor enforces the judgment with a writ of execution. 

A writ of execution must:

• State the court and the county where it was entered and the amount of money actually due on the judgment. 

• Contain a notice that includes information identifying the judgment debtor. Otherwise, the writ of execution must be returned to the sheriff or levying officer. 

• Direct a sheriff or levying officer to collect wages as allowed by law. Earnings withheld from a judgment debtor must be turned over to the sheriff or levying officer within five days of the day the earnings are withheld.

• Contain an attached document that reasonably describes the amount of wages that are exempt from garnishment by a writ of execution. 

The writ of execution continues for 120 days or until the judgment is satisfied, whichever happens first. The garnishment applies to what you’ve earned on or after the date the writ is served until the writ expires. If there’s more than one garnishment order on your wages, priority is determined by the date and time your employer was served with each writ. This means that a writ of execution used as a wage garnishment order is only effective for approximately four months, but your wages may be garnished by more than one writ of execution.

3. A judgment debtor can claim exemptions to garnishment.

After a Montana court issues a writ of execution, you can claim an exemption by filing a written request for a hearing with the court that issued the writ. You must also include a written statement describing the property that you claim is exempt and the reasons for your exemption claim. You must also submit any documents that serve as evidence of this claim. 

On the date you file these documents, you must mail a copy of the request, statement, and other documentation to the judgment creditor or the judgment creditor's attorney and to the sheriff or levying officer. You also need to file this packet within 10 days (excluding weekends and holidays) of the date you received notification of the writ of execution if you were served in person, or the date notification was mailed to you if you were served by mail.

If you fail to file the request paperwork to claim an exemption within the 10-day period, you can’t claim an exemption for your seized wages. 

If you do file a request, the court must conduct a hearing within 10 days, excluding weekends and holidays, from the date it received your request. The court will decide on your claim and issue an order, which will be forwarded to the sheriff or levying officer. This will affect the final wage garnishment order.

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

When a creditor garnishes your wages, the maximum amount they take can’t exceed the judgment plus interest and costs. The amount they can take each pay period is also limited. Montana follows federal wage garnishment laws. The maximum garnishment amount that judgment creditors can take from a single paycheck is the lesser of the following: 

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

• The amount that your disposable earnings exceed 30 times the federal minimum hourly wage. The current federal minimum wage is $7.25, and 30 times that is $217.50. If you make $217.50 a week or less, your wages can’t be garnished.

How To Stop a Garnishment in Montana

Montana law uses the federal wage garnishment guidelines to determine what you can keep when your wages are garnished. You can always choose to let the wage garnishment continue every pay period until you fully repay the debt. You can also pay the amount you owe off through a lump-sum payment. If you can’t afford that, you can try to negotiate with the creditor and work out a payment plan.

Another way to stop wage garnishment in Montana is by filing bankruptcy. Filing a bankruptcy case triggers the automatic stay, which requires most debt collection tools like garnishment to stop. If the debt is an unsecured debt like a credit card, it can be discharged in bankruptcy. Keep in mind you can’t discharge debts like taxes, student loans, and family support obligations like alimony and child support. But filing bankruptcy will postpone a garnishment for these types of debts, which can help you reorganize your finances.

Montana’s bankruptcy exemptions will shield some of your assets from creditors. Upsolve provides a free online tool that can help you file Chapter 7 bankruptcy without an attorney. If you want legal advice from a professional, Upsolve can help you find a qualified attorney near you. Most bankruptcy attorneys provide free consultations.

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

Montana offers the following legal aid/self-help resources: 

• MontanaLawHelp.org has resources on the wage garnishment process.

• Montana Legal Services Association provides free legal help for civil matters and has information on wage garnishment and other legal matters.

• Court Help Program from the Montana Supreme Court has self-help resources.