Garnishment allows creditors to intercept a portion of the debtor's wages to offset a debt. Typically, the employer submits payments directly to the creditor or a third party. However, if the debtor moves out of state or works for an out-of-state employer, the process becomes more complicated. While not impossible, moving out of state can cause delays in the garnishment process until the creditor gets the new state to accept the validity of the judgment by following state laws or domesticating the garnishment order.
Process of Garnishment
Most courts require a creditor to receive a judgment against a debtor before they will order a garnishment for most types of debt. Equipped with a judgment, a creditor files a writ of garnishment with the court that issued the judgment and serves the writ on the employer. The employer usually must respond to the writ within a brief period of time and begin withholding wages promptly.
States have their own restrictions and rules regarding garnishments that can affect the ability of creditors to collect. If these rules are not strictly followed, a debtor can object to the garnishment on procedural grounds. North Carolina, South Carolina, Pennsylvania and Texas prohibit the garnishment of wages for consumer debts. Specifically, South Carolina's law regarding wage garnishment prohibits any garnishment for consumer transactions "regardless of where made."
State law might provide further barriers for recognizing an out-of-court writ of garnishment, including whether the court has personal jurisdiction over the debtor's state, whether the debtor received proper notice as required by the issuing state's law and whether other rules of civil procedure have been complied with that make the order valid in the debtor's state. If the law in the state where the employee now resides has not been followed, the debtor might be able to object to the garnishment.
Generally, employers who do not conduct business in the state where the garnishment was issued or have no other connections to the state are not subject to the writ of garnishment because the state lacks jurisdiction over the employer. However, some states give the employer the discretion to obey the writ of garnishment. For example, the North Carolina Department of Labor states that it does not violate North Carolina's laws for an employer to garnish wages if it receives a valid order from another state, even though North Carolina primarily prohibits wage garnishment.
Domestication of Judgments
Even in states where wages cannot be garnished, an employee in that state can still be subject to garnishment if a creditor has a valid judgment in a different state. The Uniform Enforcement of Foreign Judgments, which has been adopted in many states, allows creditors to obtain a valid judgment in a different state by filing proof of the judgment and providing the last known address of the parties. Once the judgment is verified, the case proceeds the same way as if the original judgment was entered in the employee's state of residence. The only states that have not adopted these rules are California, Indiana, Massachusetts, North Carolina and Vermont.
The procedure for entering a judgment in those states depends on state law. For example, California requires the registration of the judgment and issues an immediate judgment. The debtor has 30 days to file to vacate the judgment if there are any procedural grounds that give him this right, such as lack of jurisdiction.