How To Stop Florida Wage Garnishment
Florida’s Wage Exemption Statute provides relatively generous protection for those who meet the definition of “head of family” and are facing a judicial garnishment or filing for bankruptcy. To paraphrase the Statute, a head of family who pays for more than 50% of a dependent’s living expenses can not be garnished if their net income after deductions is less than $750 per week. If the head of family earns more than $750 per week after deductions, then they can only be garnished on the amount that exceeds $750 if they signed a written waiver allowing a creditor to seize income. Fla Stat. § 222.11 In other words, a head of family can not be garnished unless they agree in writing to be garnished. For those who do not qualify as a head of family (or have signed a waiver), wage garnishments are limited to 25% of net income as provided under the Federal Consumer Credit Protection Act. 15 U.S.C. § 1673.
Florida Wage Garnishment Protection
Wage garnishment protection in Florida is not limited to income but also includes certain accumulated earnings. Exempt income deposited in a bank is also exempt from garnishment for six months after the deposit date, provided the money is identifiable as income and has not been commingled with other funds. Fla Stat. § 222.11 (3) Furthermore, the wage garnishment exemption, which protects accumulated earnings, is not limited to those who are the head of the family. In other words, a non-head of family may exempt 75% of their net earnings deposited for 6 months if they are also identifiable and traceable.
Debtors’ Rights in Florida
For those who are considering filing bankruptcy, Florida’s wage garnishment exemption can be an important tool for protecting earnings, but it comes with certain limitations. For example, a head of family may be able to file bankruptcy and claim the wage garnishment exemption of § 222.11 (3) in order to protect 6 months worth of earnings that have accumulated in the bank. However, the exemption of earnings deposited in bank accounts is limited to funds that are traceable and have not been commingled with other sources of income or deposits.
For this reason, it is usually advisable to have income deposited in a separate or segregated bank account that only holds earnings. A second limitation that is relevant under bankruptcy law applies to independent contractors. In short, income earned by independent contractors does not qualify for protection under Florida’s wage exemption statute. In re Schlein, 8 F.3d 745 (11th Cir. 1993) In order to determine if an individual is an independent contractor, the courts will look at factors such as whether there is an employment contract, which party controls the labor or provides the tools, and the method of payment used. In re Moriarty, 27 B.R. 73 (Bankr. M. D. Fla. 1983)
Florida’s wage exemption statute provides broad protections for those who qualify as head of family in terms of protecting current income and accumulated savings, but it should be understood as also containing certain important limitations. Neither the earnings of independent contractors nor untraceable and commingled funds on deposit may be protected from creditors. If possible, it is important to segregate earnings in a separate bank account to preserve their exempt status and avoid garnishment or creditor attachment. In terms of filing bankruptcy, a little exemption planning can go a long way toward keeping more of what you own.
How to Claim the Florida Exemption to Stop a Wage Garnishment
If a monetary judgment has been entered against you by a Florida court, the judgment holder has several options for collecting payment. One method is a “bank levy,” in which a checking or savings account is frozen so that funds can be withdrawn to pay the judgment holder. Another example is a “wage garnishment,” in which earned income is taken from an employer and paid to the judgment holder. If you meet the criteria for “head-of-household,” you may be able to unfreeze a bank levy and stop a wage garnishment.
Head of Household Exemption in Florida
Under Florida law, a head-of-household may be able to claim an exemption from garnishment by filing an Affidavit and Claim of Exemption form with the Clerk of Court located in the county where the judgment was entered. (A different procedure may apply to stop a garnishment that has already been granted.) A sample of these wage exemption forms is included here for informational purposes only. Note that these forms are keyed for Dade County, Florida and it may be necessary to contact the specific Clerk of Court to obtain copies of the forms used in a particular county.
Once the affidavit and exemption forms are completed and notarized, the documents must be filed with the Clerk of Court, and copies served on the plaintiff who holds the judgment. If the judgment holder objects to the claim of exemption within two to seven days, depending upon the form of service that is used, then a hearing will be scheduled. The purpose of a hearing is to allow the debtor an opportunity to prove their status as head-of-household, and their right to claim the exemption. The failure of the plaintiff to object within this time frame will typically result in the garnishment being stopped, without the need for a hearing.
Filing bankruptcy in Florida is also an option for stopping a garnishment or unfreezing a bank account levy. One advantage to filing bankruptcy is that it will not only stop the garnishment process, but will also discharge the underlying debt in most circumstances. However, the ability to discharge a debt secured by a judgment depends upon numerous factors that are best discussed with a bankruptcy attorney.
Claiming a wage garnishment exemption outside of filing bankruptcy is a fairly straightforward process, but certain specific legal procedures must be followed in order for it to be done correctly. Otherwise, the court may reject the exemption on the grounds of failing to properly complete the forms, or failing to properly serve the plaintiff. And it should be noted that even if a plaintiff is prevented from levying a bank account, or garnishing a wage, there may be other means available for attempting to collect on the judgment that can be used in the future.
As an alternative, bankruptcy may not only put a stop to these types of current collections efforts, and may eliminate the debt from possible future collection. Again, discharging a debt that is subject to a judgment can be a complicated matter that is best discussed with a bankruptcy attorney who can appropriately evaluate the specific facts of your situation. But a qualified bankruptcy attorney should also be able to advise a potential client of their non-bankruptcy options since filing is not always the best solution to every problem.