Money & Debt

A wage garnishment is when a part of a person’s wages are taken to pay for a debt they owe. This is also called a turnover order. The person who owes the money is called the debtor. The person they owe the money to is called the creditor. You may be called the respondent.

This article explains how to respond when you receive notice that your employee’s wages are being garnished or you have received court papers called a third party citation.

If you are a debtor and have received a Citation to Discover Assets, you can protect money and property from collection by using a Motion to Claim Exemption and a Notice of Motion.

Types of [no-lexicon]wage[/no-lexicon] [no-lexicon]garnishments[/no-lexicon], turnover orders, or [no-lexicon]wage deductions[/no-lexicon]

The simplest type of garnishment or turnover order is for a debt owed to a regular creditor. An example of a regular creditor, is a credit card company, a hospital, a doctor, a finance company for a car, etc. 

There are also garnishments for child support, or a debt owed to the government. For example, student loans, or government benefits overpayments. These garnishments are handled differently.

How wage garnishments or turnovers under third-party citations work

A regular garnishment or turnover order can only happen after the creditor gets a judgment against the debtor in a court case. That means a judge has decided that the debtor owes money. Before the judgment is entered by a court, it is just a claim that the debtor owes something. 

After the judgment is made, it is a fact that the debtor owes money. Once the judgment has been entered, a collection case stops being about how much the debtor owes and becomes about how the debtor will pay. 

If a debtor does not pay a judgment against them, and they have a job, the creditor can try a wage garnishment or a third party citation. A wage garnishment or a third party citation requires you, the employer, to pay the creditor directly out of the employee’s wages if they earn enough money.

A wage garnishment starts with a wage deduction summons or a third party citation. The creditor sends this document to you, along with interrogatories. These are questions about the debtor’s employment and income. The interrogatories are on the back of the summons or third-party citation, or a separate document.

How to respond to an employee’s wage garnishment or third-party citation

Fill out and return the interrogatories by the deadline listed on the summons or third-party citation. If you don’t, you can become liable for the judgment entered against the debtor. 

The interrogatories ask basic questions about the debtor and their income. The first is whether the debtor works for you. If they do not, then check the “No” box, and send the form back.

If the debtor does work for you, answer the rest of the interrogatories about: 

• Pay periods,
• Hourly wage, 
• Gross pay, and 
• Required deductions from total pay.

The interrogatories explain how to calculate the amount you need to withhold for the garnishment or turnover order. 

Then, sign the form, and send a copy to the circuit clerk that issued the summons or third-party citation. Give or mail a copy of the completed interrogatories to the employee/debtor, and the creditor. 

To garnish the wages or withhold the payments, deduct the amount from each paycheck, and hold it. You will get an order from a judge, based on the answers to the interrogatories, that says what to do with that money.

Calculating a wage garnishment or turnover order

The interrogatories also ask you to estimate how much to deduct for the garnishment or turnover order.

To make that calculation, first find out if the debtor or employee’s net pay is over the debtor/employee’s exemption, or amount protected.  

If the net pay is less than the exemption, then there’s no deduction. Employees have to earn at least this exemption before their wages can be taken or withheld. 

Net pay, also known as disposable earnings, has a precise meaning in wage garnishments or third-party citations. To calculate the net pay, you must subtract certain deductions from the gross pay. The deductions you subtract from the gross pay is: 

• FICA (Social Security),
• Medicare,
• Federal tax, and 
• State tax.

When calculating the net pay for garnishment or third party citations, do not deduct things like health or dental insurance, uniform fees, union dues, or United Way from gross pay.

If the debtor or employee’s net pay is over this exemption, then multiply the gross income by 0.15 or by 15%. Compare that amount to the amount of net pay that’s not exempt, and deduct the lesser amount for the garnishment. 

Those calculations go on the interrogatories, which you must return to the circuit clerk. 

Continue to make deductions from each paycheck until you hear back from a judge. An order should arrive, telling you to send the deductions to the creditor periodically. Or, if the deduction is zero, the order may say to keep the garnishment or turnover in place and begin deductions whenever the employee’s pay increases. You do this math every time your employee gets paid. Do not withhold any wages from your employee if their net pay is under 45 times the current Illinois or Federal minimum wage, whichever is higher.