Congratulations! You prevailed in a legal lawsuit! A judge awarded you a money judgment against an individual in Utah. This is good news, but if you stop here, the judgment is nothing more than a certificate of accomplishment. You can post it on your fridge and brag to all your friends that you successfully navigated the legal system and won a lawsuit, but in the end, this judgment will provide you no financial benefit unless you can actually collect the amounts awarded to you. In fact, if you don’t collect, the judgment merely reminds you of the damages you have experienced up to this point, both the damages that justified the underlying lawsuit and the subsequent costs relating to obtaining the judgment through legal action. In short, a judgment without collection is worthless. So, what’s next?
This post discusses one of the most effective ways to collect against individuals who may not have many assets: a wage garnishment. It also discusses how you, after you obtain a judgment, can locate an individual’s employer in Utah.
Executing on Judgments Through Garnishing Wages
One of the most effective ways to collect debts owed by Utah residents is to garnish their wages. This is especially true for individuals who may not have many assets and who live from paycheck to paycheck. These individuals may not own any property, have any money in their bank accounts, or have any boats, cars, or other personal property that could be seized and sold to satisfy a judgment. For these individuals, it is best to intercept their wages before they obtain and dispose of them.
Under Utah law, a party who obtains a judgment against another (usually a creditor obtaining a judgment against a debtor) can obtain an order from a court allowing for garnishment of wages. The order (a writ of garnishment or writ of continuing garnishment) is sent to the employer who is then required to deduct a certain portion of the employee’s wages and send it to the party who is owed money (the judgment creditor). Generally, a garnishment on the employee’s wages will continue until the debt is satisfied.
As stated above, only a portion of each paycheck is deducted—not everything. Without an income, people would potentially be thrust into poverty until the debt was paid. This would not be good for society. People need enough to pay their basic living expenses. Also, if all an employee’s wages were taken, the employee would have strong motivation to simply quit his or her job and find a new one where a garnishment was not in place. This would harm the creditor (it would receive no money and would be forced to chase the creditor), the employee/debtor, and the employer. Utah follows the federal limits on wage garnishments, which are the lesser amount of either:
- 25% of the employee’s “disposable earnings” or
- The amount the disposable earnings for a pay period minus the amount in the following: the number of weeks in the pay period times 30 times the federal minimum wage (which is currently $7.25 per hour).
“Disposable earnings” under a garnishment order are the employee’s remaining wages after the employer makes all mandatory deductions but not any elective deductions. Working through the proper wage garnishment amount is a bit complicated. Here is an example. If an employee brings home $2,000 every two weeks after deducting taxes and other required deductions (i.e. his or her disposable earnings), 25% of this amount is $500. If you plug this $2,000 amount into the calculation above, you get a higher amount: $1,565 ($2,000 in disposable earnings minus the total of: 2 times 30 times $7.25). The lesser of the two amounts, $500, is the wage garnishment amount.
Locating the Employer
Although a creditor has a right to garnish wages from a debtor’s employer, the creditor must first identify where the employee works and where the garnishment order must be sent. The creditor may not know, and it may be impossible to identify the employer based on public information. If this is the case, the creditor is not out of luck. Utah law requires, in most circumstances, the Department of Workforce Services (DWS) to disclose to a creditor the name and address of a debtor’s last known employer. However, the DWS isn’t required to provide this information over the phone through an informal request. Rather, the creditor must seek and obtain an order from a court requiring this disclosure.
First, the creditor files a motion for an order requiring disclosures, which must be sent to the debtor and the DWS. Then, the debtor and DWS have an opportunity to object. If there is no objection, the order sails through. If there is an objection, the court will not grant the motion if convinced that disclosure will have a negative effect on employers’ willingness to report wage and employment information or individuals’ willingness to claim unemployment benefits. Most of these motions sail right through, with the court entering an order for disclosure. The next steps include sending this order to the DWS and entering an agreement with the DWS that obligates the creditor (or the creditor’s attorney) to properly safeguard and use the information it receives—the primary (or only) purpose being for a wage garnishment. These final steps may seem tedious and overly precautious (all that is disclosed is the name and address of the debtor’s last-known employer), but it’s what the law requires.
Assistance with Wage Garnishments
Successfully obtaining and maintaining a continuing wage garnishment is not always a simple task. If you have a judgment against a person who likely has a job, but you don’t know where he or she works, we can help. We may be able to identify the employer and begin a wage garnishment without seeking an order from a court, but if needed, we can help you identify the employer through an order from a court requiring the DWS to provide the employer’s information. If you have questions about this process, let me know. I offer a free consultation. My direct dial is 801-365-1021, and you can e-mail me at [email protected].