Tennessee is a great place to live, work, and raise a family. However, that does not mean its residents are immune from the everyday problems faced by millions of Americans nationwide. For many, who work hard but can’t seem to get ahead, there is always the fear of falling behind on bills and never being able to repay or recover. For far too many Tennessee residents, this has unfortunately hit them as well. Although debtors’ prison is no longer a remedy for any creditor, there are still legal remedies available to creditors when the debtor is either unwilling or unable to pay. The following is all about relevant Tennessee garnishment laws that apply to the state.
Using a process called wage garnishment, creditors are able to recoup their owed monies by taking a person to court and having a judge rule in favor of the creditor. Then, the money is automatically deducted from your paycheck until you no longer owe any money on the debt. It is important to note that any person or institution can be a creditor and there may be a priority to who is paid in what order based on the legal importance of that party. Before any wage garnishment action is commenced, you should attempt to resolve any debt so that you do not have to deal with the court system.
What is wage garnishment?
Wage garnishment is a legal process where, working to collect a debt, a creditor sues a debtor for payment of the money directly from the person’s wages. If the lawsuit is successful, the court will direct the debtor’s employer to remove the funds from the employee’s paycheck in order to satisfy the debt using a process known as attachment. The removed funds are then sent to the creditor and this process repeats until the debt is paid. The remainder of the money is then sent to the debtor as wage payment. For some, this may be a matter of months but for others this process could take years.
What kind of income can be garnished in Tennessee?
While some states have protections on types of income that can be garnished in the state, there are none of those sorts of protections in Tennessee. Instead, any income can be garnished in order to satisfy a judgment and often will be to ensure the payment of the debt. It is important to note that a wage garnishment action can be terminated if you enter into a payment plan with the creditor.
What debts are collectible in Tennessee?
Several different types of debt are collectible in Tennessee in addition to ordinary consumer debt. Student loans, child support, and other outstanding debts are all subject to wage garnishment actions if you do not pay. It is important to note that back taxes are able to be collected through wage garnishment without any sort of wage garnishment order via a court.
How does a creditor secure a wage garnishment order from a Tennessee court?
In most cases, a creditor, having exhausted all other remedies, will file a writ of garnishment in a Tennessee court in order to obtain the money they are owed for the good or service they provided. A writ of garnishment, if granted, will then be subject to Tennessee law on how much of your wages a creditor can take. Creditors of this sort can include car dealerships, credit cards, hospitals, stores, and any other person who extended you credit in the ordinary course of business. There are other categories where there are special circumstances for creditors such as the IRS, student loan companies, and child support.
What defenses would I have to a wage garnishment suit in a Tennessee court?
Unfortunately, if a debtor continues to owe the creditor for the good or service provided and is in possession of the good or has consumed or otherwise used the service, there are very few defenses to this sort of action. However, there are a few defenses that can stop a writ of garnishment from being successful. They include:
- The debt already having been paid
- Having entered into a payment plan and making payments on that plan to the creditor
- The writ of garnishment violates federal and/or state law by seeking more than the maximum allowed by law
What is the maximum amount of money that can be garnished from my wages in Tennessee?
Tennessee has laws that track federal law and only 25% of a person’s paycheck can be garnished.
Unlike some states, Tennessee does have some protections to ensure that not all of your paycheck or the majority of it is garnished. It is unique in that it tracks federal law closely without carve outs for specific categories of people except those enumerated in federal law. Thus, even the most successful creditors are limited to what they can get. For general creditors in Tennessee – that is, a typical commercial creditor like a hospital, credit card company, or similarly situated party – the limit is up to 25% of your disposable income. In Tennessee, disposable income is defined as all income let over after all applicable federal and state taxes have been paid.
For those who make an hourly wage, the wage garnishment in Tennessee is calculated at the amount which the debtor’s paycheck exceeds 30 times the federal minimum wage. There is an exception of allowing the debtor to subtract $2.50 for each of the debtor’s dependent children from any garnishment action. Currently, the federal minimum wage stands at $7.25 an hour and Tennessee’s minimum wage is the same amount of money.
Importantly, no matter the number of creditors a person has, only 25% of that person’s paycheck can be used to satisfy debts through wage garnishment. For example, if you owe money to creditor A only, then creditor A can seek up to 25% of your paycheck. If you owe money to creditor A and B, a court will have to decide who gets which portion of your check totaling 25% to all parties.
Are there any carve outs in Tennessee law for wage garnishment to provide for child support?
The state of Tennessee takes a much more stringent view regarding debts owed for child support and provides for a much broader taking of funds through wage garnishment to support children. Tennessee law provides for up to 50% of a person’s wages to be taken to satisfy child support obligations through wage garnishment. This is also in line with federal law.
Does federal law provide for any wage garnishment protections?
In addition to Tennessee state law, federal law provides wage garnishment protections which help ensure that a person’s wages are not completely forfeited in the case of debt. Much like Tennessee law, federal law allows a maximum of 25% of a person’s disposable income to be garnished. These garnishments do not stack on each other thus no matter the number of creditors a person has, only 25% of their paycheck will be subject to garnishment under federal law.
Additionally, federal law protects a person from being fired for having their wages garnished in the first instance. However, this does not protect a person from being fired for being the subject of a successful second wage garnishment action.
Is there a federal position on wage garnishment for alimony or child support?
Again, much like Tennessee state law, federal law is much more aggressive when the creditor seeking money from the debtor is a spouse or child of the debtor. Currently, federal law allows for up to 50% garnishment of a person’s disposable income if the debtor is currently supporting a spouse or another child. If the debtor is not supporting a spouse or another child, then federal law allows for up to 60% of the person’s disposable income to be taken in a wage garnishment action. Finally, if the debtor is more than 12 weeks behind in payments, an additional 5% may be added to help make the debtor current with all relevant obligations.
What do I do if I’m the subject of a wage garnishment action in Tennessee?
No one should ever go it alone when faced with an economically damaging legal process. You should immediately consult an attorney to help ensure you get the legal representation that you deserve to help preserve your rights in the face of a Tennessee writ of garnishment.