questions & answers

Question: I currently have a wage garnishment in place (am going to file bankruptcy but havent finished paying all amts yet) after 1st garnishment i fell at home breaking ankle dr. put me on short term disability, I pay into this thru work and have received disability insurance payments, my question is can my disablity payments be garnished (my wk's corp ofc is in Ohio, payroll dept there not entirely sure)or is it considered exempt

Answer:

Under A.R.S.12-1598, earnings are defined as the following, 4. "Earnings" means compensation paid or payable for personal services, whether these payments are called wages, salary, commission, bonus or otherwise. Earnings include periodic payments pursuant to a pension or retirement program.  Under the same statue, an individual can find other definitions that pertain to wage garnishment.

Under A.R.S. 12-1598.01, Scope of Article, it is stated that:

A. The provisions of this article are applicable to indebtedness owed to a judgment debtor by a garnishee for monies which are earnings as defined in section 12-1598, paragraph 4. Earnings become monies, as defined in section 12-1570, paragraph 6, upon their disbursement by the employer to or for the account of the employee, except disbursements into a pension or retirement fund. B. The provisions of this article are not applicable to garnishments of: 1. Indebtedness owed to a judgment debtor by a garnishee for amounts which are not earnings as defined in section 12-1598, paragraph 4. 2. Monies held by a garnishee on behalf of a judgment debtor. 3. Personal property of a judgment debtor that is in the possession of a garnishee. 4. Shares or securities of a corporation or a proprietary interest in a corporation belonging to a judgment debtor, if the garnishee is a corporation.

 It is also stated in the A.R.S. 12-1595, that:

 A.bank deposit made in the names of two or more persons shall be subject to garnishment. B. The answering garnishee shall, upon service of the writ, impound all funds then present in the bank account, and shall promptly notify each person who appears from the business records of the garnishee to have an interest in such bank account in addition to the judgment debtor that such account has been impounded, the name of the judgment creditor and judgment debtor and the court in which the action is pending as stated on the writ. The notice may be made personally or by registered mail, postage prepaid, addressed to each such person at his last known address as reflected by the business records of the garnishee. C. The answer of the garnishee, in such case, shall state under oath the names of all persons who appear from the business records of the garnishee to have an interest in the bank account in addition to the judgment debtor. Upon the filing of the answer the court shall join all persons who appear to have an interest in the bank account in addition to the judgment debtor, as reflected by the answer of garnishee, and shall proceed to a determination of the interest of the judgment debtor therein. D. Upon entry of an order based upon such proceeding all impounded funds, except those of the judgment debtor, shall be released by the garnishee. The matter shall otherwise proceed as in any other garnishment action. E. All persons whose funds are impounded under the provisions of this section shall, together with the judgment debtor, be considered to be joint and several obligees of the bond provided for by section 12-1573, but the liability of the sureties on such bond shall be limited to the amount of the penal sum named in the bond.

In terms of default by the creditor, A.R.S.12-1598.13 outlines the possible solutions:

A. If the judgment creditor fails to comply with any duty imposed upon him by this article, the court shall, upon petition of any party to the proceedings affected by such failure and after notice, hold a hearing to determine whether such failure to comply, if any, was occasioned by mistake, inadvertence or excusable neglect. If the court determines that any failure to comply was not the result of mistake, inadvertence or excusable neglect, the court shall find the judgment creditor in contempt and shall award the petitioner all of the following: 1. An amount to compensate for actual losses, if any, caused by the failure to comply. 2. Reasonable attorney fees, if the petitioner was represented by an attorney at such hearing. 3. Court costs. 4. An additional amount of not less than one hundred nor more than one thousand dollars.

Because the source of the debt is unknown and garnishment cases are complicated, especially when a planned bankruptcy is involved, one may want to consult an attorney who can better assist in the particular situation. He or she may suggest contacting the source and informing them of the current situation. One can locate an attorney in Arizona at the Arizona Bar Association website.