Many states allow creditors, such as for credit cards, personal loans and medical bills, to garnish wages to satisfy a debt the debtor owes. Maryland is one of the states that allow creditors to garnish wages. Unlike federal and state revenue agencies that do not need a court order to garnish, a creditor in Maryland needs one to garnish.
To obtain a judgment, the creditor files a lawsuit in court. The court sends the defendant or debtor notification of the lawsuit. The debtor can file an answer or objection to the suit within the period noted on the paperwork. If the court agrees with the plaintiff, it issues a judgment against the defendant. If the debtor does not pay the judgment, the creditor applies for an order to garnish wages. If the creditor obtains the wage garnishment, the court sends the garnishment order to the debtor’s employer. The latter must respond to the garnishment, stating whether it has wages for the employee. If the employer terminated the employee, the employer states this in the answer and includes details of the termination, such as the employee’s new employer and her termination date.
In Maryland, wages and salaries are not exempt from wage garnishment. Exempt income includes pension benefits, public assistance, such as unemployment benefits, general assistance and workers’ compensation, child support, and insurance or annuities benefits.
Federal law says an employer can withhold the lesser of 25 percent of disposable income or the amount by which the disposable income exceeds 30 times the federal minimum hourly wage. Maryland law says it can withhold under those circumstances if the employee lives in Kent, Worchester, Caroline or Queen Anne’s counties. If not, the employer can withhold the lesser of 25 percent of disposable earnings or $145 weekly.
The employee’s disposable income is her pay after all legally required deductions have been subtracted. A wage garnishment in Maryland accrues interest from the judgment date until the balance is satisfied. If the debtor is no longer employed, and the employer notifies the court and the creditor accordingly, the garnishment ends 90 days after the employee’s termination date, except if the employee obtains employment during that period. The creditor must request a hearing with the court within 15 days after the termination notice; if not, the court may dismiss the garnishment.
Stopping the Garnishment
In Maryland, an employee can stop a wage garnishment by contacting the creditor and negotiating a payment plan, which allows him to pay off the debt over time, having the judgment set aside, if proper procedures were not followed in serving him the complaint, or by filing for automatic stay bankruptcy. The latter protects the debtor and his property or rights to property, such as his wages, from collection actions. If the garnishment is causing him financial hardship, the employee can file a hardship claim with the issuing court. To win the claim, he must prove that the garnishment is preventing him from affording life’s necessities.