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 South Dakota regulates wage garnishments.
Written by Upsolve Team.
Updated December 31, 2021
Whether you’re farming in rural South Dakota, working at the Sanford USD Medical Center in Sioux Falls, or serving tourists at a local casino, having your wages garnished can cause financial hardship. When a creditor garnishes your wages, the money is taken directly from your paycheck. This can make paying the rent or buying groceries even more difficult.
But you can take action to stop wage garnishment. We’ll fill you in on what a wage garnishment is and how much of your wages can be garnished in the Mount Rushmore State. We’ll also help you learn about the wage garnishment process and the steps to take to protect your paycheck.
What Is Wage Garnishment?
Wage garnishment is a legal tool creditors use to collect past-due debt from your paycheck. This is sometimes called a wage attachment. Most creditors must get a court order for wage garnishment to collect debt from credit cards, medical bills, personal loans, foreclosures, payday loans, rent, and auto loans. Some creditors don’t need to get a court order to garnish your wages for certain kinds of debt, including government debts, child support, and alimony. These each follow a different administrative procedure.
The Consumer Credit Protection Act (CCPA) is the federal law governing wage garnishment. Chapter 21 of the South Dakota Codified Laws and the South Dakota Rules of Civil Procedure are the state’s wage garnishment laws. Tribal Courts have separate laws that apply to judgments and garnishments. For instance, the Standing Rock Sioux Code of Justice and the Osage Nation Tribal Code govern those respective tribes’ wage garnishment processes.
Who Can Garnish My Wages in South Dakota?
Creditors, debt collectors, and debt buyers have the legal right to garnish your wages in South Dakota once they have a court judgment.
Most states have only federal and state laws governing wage garnishment, but South Dakota also has tribal law. Tribal law governs wage garnishments generally in geographic regions legally defined as Indian Country. Some tribal laws follow state and federal law, but other tribal laws specify that a judgment from another jurisdiction doesn’t apply. A court judgment from outside a tribal reservation may or may not be valid under tribal laws. Back in 2014, a payday lender unsuccessfully tried to garnish wages through tribal courts and was fined for deceptive practices.
If you work on a reservation, be sure to talk to a consumer protection attorney to see if you have extra protections under tribal law.
Although consumer debts require a court judgment for wage and bank garnishments, your wages and bank account can be garnished for child support payments and alimony without a court procedure. IRS income tax debt and debt from federal student loans also don’t require court procedures to collect debt.
This article is focused on South Dakota garnishments that require a court order, such as credit card debt, back rent, and medical bills.
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South Dakota Wage Garnishment Process
There are many steps in the South Dakota wage garnishment process.
Step 1: The creditor brings a debt collection lawsuit and wins a judgment.
After a creditor has been granted a judgment by a South Dakota court, the garnishment process begins. It doesn’t have to start right away. Under state law, a creditor can garnish your wages up to 20 years after getting a state court judgment.
During the process, the creditor is referred to as the plaintiff or judgment creditor, and you’re the defendant or judgment debtor. Your employer will be served with garnishment papers, and they are referred to as the garnishee. The employer can suffer legal consequences if they ignore the legal papers they are served.
Step 2: The creditor serves a garnishee summons and affidavit to you and your employer.
The creditor will fill out an affidavit with details about the debt and request a garnishee summons from the court to serve on your employer. After the court approves the paperwork, the creditor can serve the garnishee summons and affidavit on your employer. Once the garnishment summons is served on the employer, the employer is liable for the debt and must start garnishing wages.
Your employer must send you, the judgment debtor, a copy of the garnishee summons and affidavit within 30 days of being served.
Step 3: Your employer sends a garnishment disclosure form (answer) to the creditor and requests exemptions.
The employer must fill out a garnishment disclosure form that answers questions about your employment and then send it to the creditor. This form includes calculations to determine if you are exempt from having your wages garnished. If you make less than a certain amount, the creditor can’t garnish your wages. This form is considered the garnishee’s answer. In South Dakota, the employer can object to the garnishment demand and request an exemption for the employee. You will be sent a copy of this answer.
Step 4: Either party can make a motion to object.
Within 30 days of your employer answering the summons and returning the disclosure form, either you or the plaintiff can make a motion to object and take the matter to trial. Objections might include that the wages are wrong, you’re exempt from garnishment, you’re not responsible for the debt, or that the debt was discharged in bankruptcy. It’s a good idea to talk to a lawyer about a South Dakota wage garnishment objection. There could also be issues with proper service and tribal jurisdiction.
Step 5: There’s a trial if you object.
If you object to the wage garnishment, a hearing will be held. If you don’t show up for the hearing, the court will grant a default judgment to the creditor.
Step 6: Your wages are garnished or exempt from garnishment.
If you are exempt from having your wages garnished because you don’t make enough or because you don’t owe the debt, your wages won’t be garnished. If your wages can be garnished, a garnishment order will take effect and require your employer to start garnishing your wages immediately.
How Much of My Paycheck Can Be Taken by Wage Garnishment?
The judgment creditor can’t take more than the judgment amount, including fees, costs, and interests. The amount garnished will depend on how much you make, how much you owe, and whether you live in a tribal jurisdiction. Federal law, state law, and tribal law set limits on how much money a creditor can take from your earnings to pay off a debt.
The laws start by looking at your disposable earnings. Those are your wages after mandatory deductions are made, such as taxes and Social Security. Bonuses, commissions, and profit-sharing are considered wages, but since tips don’t come from an employer, the courts have held that certain tips are not wages.
In South Dakota, you can have more than one creditor garnish your earnings but combined they can’t exceed the state limits. Under South Dakota state law the amount that can be garnished from your disposable income is the lesser of these two:
20% of your disposable earnings for a week, or
The amount your weekly earnings exceed 40 times the federal minimum wage, or state wage if greater, less $25 per week for each dependent family member residing with you (not including yourself). Currently, the South Dakota minimum wage ($9.45) is greater than the federal wage ($7.25). So this would be $378/week minus the amount for any dependents.
This is the formula for consumer debt. It will be different for child support or defaulted student loans.
How To Stop a Garnishment in South Dakota
You might be able to negotiate a payment plan directly with the creditor before the wage garnishment goes into place. This will keep your employer from being involved. You could also pay the debt in full. Another option to stop the wage garnishment is to file bankruptcy. When you file bankruptcy, an automatic stay goes into place that requires creditors to immediately stop debt collection activity. You could even get all your unsecured debt discharged in bankruptcy so you don’t have to worry about a creditor from 20 years ago coming back to garnish your wages.
If you’re considering filing bankruptcy you may be worried about losing your property or other assets. Luckily, there are protections for some assets. South Dakota uses federal exemption laws to allow you to keep certain property when you file bankruptcy, but you must have been a resident of South Dakota for two years.
A bankruptcy attorney can give you advice and support during this process. If a bankruptcy attorney isn’t in your budget, a legal aid office may be able to help. You can also file a Chapter 7 bankruptcy yourself using Upsolve’s free bankruptcy app, which guides you through the process.
Are There Any Resources for People Facing Wage Garnishment in South Dakota?
Here are some resources to help you with wage garnishment in South Dakota:
Free Legal Answers SD – Sponsored by the American Bar Association, this resource connects you with an attorney.
South Dakota Courts website – Contact information for South Dakota courts and links to legal resources. Type “wage garnishment” in the search bar to locate downloadable forms and information on wage garnishment.
Consumer Protection Handbook – PDF on consumer protection from the South Dakota Attorney general with state information on wage garnishment.