Filing a Garnishment Exemption Claim

For more information regarding garnishment exemptions, click on the pdf version.

What is Garnishment? [i]
An individual or company (called the plaintiff) sues an individual (defendant) on a debt, and the court awards the plaintiff a judgment. The plaintiff, in this example is now called the judgment creditor and the defendant is called the judgment debtor. The judgment creditor seeks to garnish (a court proceeding to collect money owed to the judgment debtor) such as a bank account or the wages. The judgment debtor's bank or employer in this example is called a garnishee.

A bank garnishee is required by law to stop (freeze) any activity in an account held by the judgment debtor. Any amount of money in the bank account, up to the amount of the judgment is garnished. The judgment debtor is told about the garnishment only after the bank is ordered to freeze the account. This means that the judgment debtor cannot get to the money in the account.

Any checks that the judgment debtor has written but not cleared, are returned unpaid. Also, any money that is put into the account after the bank receives the garnishment order, is garnished. In addition, the judgment debtor is usually charged fees for the unpaid (bounced) checks, other account fees and a fee of approximately $100.00 paid to the bank that the account holder agreed to pay when they opened the account.

A wage garnishment is a court order obtained by the judgment creditor telling the judgment debtor's employer to garnish a percentage of the debtor's wages for a period up to six months.

There are ways that the garnished funds in a bank account or garnished wages can be ordered by the court to be returned to the judgment debtor. If the court orders the return of the garnished funds, it does not mean that the debtor does not owe the amount garnished. The judgment creditor can keep trying to garnish the judgment debtor's bank account or wages until the judgment is paid.

If a bank account or wages are garnished, the judgment debtor will receive a Garnishment Summons Form (DC-451). This Summons informs the debtor what bank account or wages are garnished, the amount of the judgment against the debtor and the court and date of the garnishment hearing.

You should also have received a yellow-colored document with the title Request for Hearing - Garnishment Exemption Claim [Form DC-454]

The Garnishment Exemption Claim lists 22 federal and state exemptions. If the funds in the garnished bank account are any of the exemptions, the Claim can be filed with the court. In a hearing, the judge will determine if the bank funds qualify for an exemption and if so, will release them from the garnishment. Exemption number 11. is a homestead deed. This exemption is for both bank and wage exemption claims and is addressed in more detail below.

If a bank account is garnished, the debtor should first determine if the funds in the account are any funds described in 1. through 10. or 12. through 22. For example, if the funds in the account are number 1. Social Security benefits, check number 1. At the bottom of the Claim fill in the debtor's address, telephone number and date. Then sign it in the signature box. If the funds in the bank account are not described in 1. through 10. or 12. through 22., see Homestead Deed below.

File the Claim with the Clerk of the court where the garnishment action is pending and request a hearing date. At the hearing bring proof of the fact that the funds in the garnished bank account is exempt funds (in the example proof that the funds are Social Security benefits). If the judge agrees she/he will order the bank to unfreeze the account and the debtor will have access to the funds again.

Most banks claim a processing fee of $75.00 or more when they receive a garnishment summons for a checking or savings account.

Again, if the funds in the bank account are not described in 1. through 10. or 12. through 22., those funds may still be protected from garnishment by using exemption number 11. This is the Homestead Exemption of $5000 in cash. In addition, upon a showing that a householder supports dependents, the householder shall be entitled to hold exempt from creditor process personal property not exceeding $500 in value for each dependent. This same exemption can be used to protect garnished wages. The details regarding the use of exemption 11., are below.

Exemption Using the Homestead Deed
The Homestead Exemption has nothing to do with owning a home. Every resident of the State of Virginia has a lifetime homestead exemption of $5,000. Lifetime means that if, for example, a Virginia-resident debtor uses $1,000 of the $5,000 exemption, he or she has only $4,000 left for a future homestead exemption. Once the entire $5,000 is used, the debtor cannot use this exemption.

On July 1, 2009, § 34-4.[ Exemption created.] was amended. It now permits residents of the State of Virginia who are 65 years of age or older, a lifetime exemption of $10,000.

Using the homestead deed for exempting funds in a bank account or wages, is more complicated than using exemptions 1. through 10. or 12. through 22. for a bank account. First, you must prepare a Homestead Deed.

Generally, the employer garnishes twenty-five percent of the employee's (judgment debtor) wages. The Homestead Exemption of $5000 in cash. is the only exemption available to protect wages. See Virginia Code § 34-29. If the garnishment is for wages, how much will the employer-garnishee garnish as of the Hearing Date & Time? Put this amount in the Homestead Deed below in the field "Value of property described above".

Bank Account Garnishment

Determine the amount of funds in the bank account or if more than one account, the total amount in all of the accounts belonging to the judgment debtor. Put this amount in the Homestead Deed the field "Value of the property described above”.

If numbers 7. and 8. are filled in, you will have to inquire in the circuit court where the homestead deed was filed to determine how much was exempted.

Fill out the remainder of the Homestead Deed and have the signature notarized. File the Homestead Deed in the Virginia Circuit Court for the county/city where the judgment debtor resides. There is a filing fee of $21.00. Get a copy of the filed Homestead.

Cover Letter: Circuit courts require a cover letter (sometimes referred to as an abstract) with the homestead deed. Contact the Clerk, Civil Division, for information regarding the cover letter. For example, the Fairfax County Cover Sheet is at http://166.94.9.156/coversheet/coversheet.aspx

Garnishment Exemption Hearing
Come to court on the date of the hearing with copies of the filed Homestead Deed and the Garnishment Exemption Claim. A judgment debtor has the right to a hearing on her/his claim of exemption from garnishment no later than seven business days from the date that the claim is filed with the court. § 8.01-512.5 Hearing on claim of exemption from garnishment.

Special Situation

On July 1, 2009, § 34-4.2 [Additional exemption for parents of dependent children.] was amended.

If a parent, whose household gross income, including any support payments for children living in the home, does not exceed $1,750 per month, he/she can exempt from wage garnishment the following:

On July 1, 2007, §§ 8.01-512.4 and 20-108.1 of the Code of Virginia, relating to exempting child support payments from garnishment, were amend and reenacted. Pursuant to these amendments, number 21. was added to the “Major Exemptions Under Federal and Virginia State Law” [see Notice To Judgment Debtor- How To Claim Exemptions From Garnishment [Form DC-454]] Child support payments (§ 20-108.1, Code of Virginia).

What About Commingled Social Security Benefits?
Social security benefits are protected even if they are commingled in a savings or checking account with funds from other sources. See Philpott v. Essex County Welfare Board, 409 U.S. 413, 416-17, 34 L. Ed. 2d 608, 93 S. Ct. 590 (1973). If the recipient of social security benefits commingles the benefits with other funds, he is entitled to protection as to those funds that are reasonably traceable to social security income. See Philpott, 409 U.S. at 416-17.

NCNB Financial Services, Inc., V. Joseph B. Shumate, Jr., 829 F. Supp. 178, Western District of Virginia, Roanoke Division (1993)

Non-government long-term and short-term disability benefits can be exempted from garnishment. See the Notice To Judgment Debtor- How To Claim Exemptions From Garnishment [Form DC-454] at number 16. Proceeds from industrial sick benefits insurance (§ 38.2-3549 Benefits not subject to legal process., Code of Virginia). See also, § 38.2-3406 Accident and sickness benefits not subject to legal process, Code of Virginia.

For joint bank accounts and joint accounts belonging to husband and wife and only one is the judgment debtor, review Virginia Code § 6.1-125.3.

§ 6.1-125.3	Ownership during lifetime; garnishment, attachment or levy.
§ 23-38.81.	Prepaid tuition contracts and savings trust agreements; terms; termination etc.
§ 34-26	Poor debtor's exemption; exempt articles enumerated.
§ 34-27.	Additional articles exempted to householder engaged in agriculture other information regarding the Homestead exemption.
§ 34-29.	Maximum portion of disposable earnings subject to garnishment.
§ 34-1.	Definitions.
§ 34-4.	Exemption created.
§ 34-14.	How set apart in personal estate; form to claim exemption of personal property.
§ 34-22.	Waiver of exemption; its effect; form of waiver.
§ 34-34.	Certain retirement benefits exempt.
§ 38.2-3406	Accident and sickness benefits not subject to legal process.
§ 38.2-3549	Benefits not subject to legal process.
§ 8.01-512.4	Notice of exemptions from garnishment
§ 8.01-512.5	Hearing on claim of exemption from garnishment.
§ 20-108.1	Determination of child or spousal support

Determine what are the net "disposable earnings" by calculating the gross earnings, then deducting from gross earnings those amounts required by law to be withheld, such as federal and state taxes and social security withholdings. In calculating disposable earnings, do not deduct other payroll deductions such as insurance premiums, savings plans or retirement contributions.

Determine the maximum amount that may be withheld from net "disposable earnings." A description of this calculation is provided on the back of the attached Garnishment Summons. The following is a way to implement this part of the procedure:

On the front of the Garnishment Summons under "Maximum Amount of Disposable Earnings Subject to Garnishment," see which boxes have been checked to calculate the maximum amount subject to garnishment.

If Support is checked, then multiply "disposable earnings" by the percentage checked underneath "Support"-if no box is checked, then use 50%.

If none of the boxes are checked, use the information below and, where a percentage is given, multiply "disposable earnings" by the applicable percentage.

Determine if other deductions for child support or other garnishments apply to the judgment debtor.

Virginia law requires that payments for support ordered by a court or by the Division of Child Support Enforcement must be deducted from the maximum amount subject to garnishment as calculated above in the second step to determine the amount left for garnishments. (There may be no wages left.)

Summary

For a general idea of how to determine the amount garnished from wages:

If your net disposable wages are less than $262.00 per week, no money can be garnished.

If your net disposable wages are between $262.00 and less than $349.00 , only the amount over $262.00 can be taken from the wages.

If your net disposable wages are over $349.00, the full 25% can be garnished from the wages.

Beginning July 24, 2009, $290.00 of each week’s net “disposable net earnings” cannot be garnished. If a week’s net “disposable net earnings” is between $290.00 and $386.66, each dollar over $290.00 is withheld for the garnishment. If a week’s net “disposable net earnings” is over $386.66, then the amount of that week’s net “disposable net earnings” garnished is a straight 25%.

[i] For a discussion of the garnishment process in Virginia, see In re Richard E. Meyer, 211 B.R. 203 (U.S. Bankruptcy Court for the Eastern District of Va., Alexandria Division). The importance of this decision is the necessity for the judgment debtor to request that her/his bank set up a specially designated bank account for exempt funds, for example Social Security benefits. However, Judge Stephen S. Mitchell, United States Bankruptcy Judge, also covers many other pertinent areas of Virginia’s garnishment procedures.