AB354: Bill Text

April 22, 2005 - Introduced by Representatives Owens, Jeskewitz, Ainsworth, Nass, Hundertmark, Van Roy, Albers and Hahn, cosponsored by Senators Roessler, Olsen and Grothman. Referred to Committee on Judiciary.

AB354,1,4 An Act to amend 812.30 (8), 812.35 (5), 812.35 (6), 812.40, 812.44 (3) (form), 812.44 (4) (form) and 812.44 (5) (form); and to create 812.30 (7m), 812.34 (2) (b) 3. and 812.35 (7) of the statutes; relating to: garnishment of the income of a minor.

Analysis by the Legislative Reference Bureau

Under current law, a person who has a civil judgment for a debt may bring an action in circuit court to garnish the earnings of the person who owes the debt. The creditor is required to comply with specified court procedures when bringing the action, including serving one earnings garnishment form upon the debtor and the other form upon the person who is the debtor's employer. Currently, the debtor may claim an exemption from the garnishment or may assert a defense against the garnishment.

Under current law, 80 percent of the debtor's disposable earnings (earnings left after deducting social security, federal, and state taxes) are exempt from garnishment. In addition, if the debtor's household income is below the poverty level or if the debtor is receiving needs-based public assistance, all of the debtor's earnings are exempt from garnishment. Currently, "household income" for purposes of this exemption is defined to mean the disposable income of the debtor and the debtor's dependents during the month in which the garnishment is in effect, plus any unearned income received that month by the debtor and the debtor's dependents, minus any of the debtor's earnings assigned by a family court order. The family court may order the assignment of a person's earnings for the payment of child support, family support, or maintenance.

Under this bill, if the debtor is a minor other than an emancipated minor, the monthly disposable earnings of the debtor, of the parents of the debtor with whom the debtor lives for at least 50 percent of the month, and of those parents' dependents, plus the unearned income of the debtor, parents, and dependents, minus any of the earnings of the debtor and parents that are assigned by a family court, are considered the debtor's household income for purposes of a garnishment action. The bill, however, exempts from garnishment all of an unemancipated minor's earnings if the judgment that the creditor is seeking to satisfy is not a judgment for unpaid restitution, costs, a forfeiture, or a surcharge entered by the court assigned to exercise jurisdiction under the juvenile justice code.

Under current law, an earnings garnishment lasts for 13 weeks or until the debt is collected through the garnishment, whichever is less, except that for public employees, the garnishment continues until the debt is paid in full. This bill provides that the garnishment of a minor debtor who is not emancipated continues until the debt is paid in full.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB354, s. 1 Section 1. 812.30 (7m) of the statutes is created to read:

AB354,2,2 812.30 (7m) "Emancipated minor" has the meaning given in s. 48.375 (2) (e).

AB354, s. 2 Section 2. 812.30 (8) of the statutes is amended to read:

AB354,2,13 812.30 (8) "Household income" means the disposable earnings of the debtor and dependents during any month in which the garnishment is in effect, plus unearned income received by the debtor and dependents in that month, less any of the debtor's earnings assigned by court order under ch. 767. If the debtor is a minor, other than an emancipated minor, "household income" means the disposable earnings of the debtor, of the parent that the debtor resides with for at least 50 percent of the month, and of the parent's dependents during any month in which the garnishment is in effect, plus unearned income received by the debtor, the parent, and the parent's dependents in that month, less any of the debtor's and the parent's earnings assigned by court order under ch. 767.

AB354, s. 3 Section 3. 812.34 (2) (b) 3. of the statutes is created to read:

AB354,3,5 812.34 (2) (b) 3. The debtor is a minor, other than an emancipated minor, and the judgment that the creditor is seeking to satisfy is not a judgment for unpaid restitution, costs, a forfeiture, or a surcharge entered by the juvenile court under s. 895.035 (2m) (a) or (b).

AB354, s. 4 Section 4. 812.35 (5) of the statutes is amended to read:

AB354,3,14 812.35 (5) Upon Except as provided in sub. (7), after being served, the garnishee shall determine whether the garnishee may become obligated to the debtor for earnings earned within pay periods beginning within 13 weeks after the date of service. If it is unlikely that the garnishee will become so obligated, the garnishee shall send a statement of that fact to the creditor by the end of the 7th business day after receiving the earnings garnishment form under sub. (3). The creditor shall send a copy of this statement to the court within 7 business days after receipt of the statement.

AB354, s. 5 Section 5. 812.35 (6) of the statutes is amended to read:

AB354,4,3 812.35 (6) If Except as provided in sub. (7), if the garnishee may become obligated to the debtor for earnings earned within pay periods beginning within 13 weeks after the date of service, but one or more earnings garnishments against the debtor have already been served on the garnishee and not terminated, the garnishee shall retain the earnings garnishment form and place the garnishment into effect the pay period after the last of any prior earnings garnishments terminates. The garnishee shall notify the debtor of the amount of the garnishment and shall notify the creditor of the amount owed on the pending garnishments by the end of the 7th business day after receipt of the garnishment form under sub. (3). If, before the earnings garnishment takes effect, the garnishee determines that it is unlikely that the garnishee will continue to be obligated to the debtor for earnings, the garnishee shall notify the creditor and court under sub. (5) within 7 business days after making that determination.

AB354, s. 6 Section 6. 812.35 (7) of the statutes is created to read:

AB354,4,13 812.35 (7) (a) If the debtor is a minor, other than an emancipated minor, the garnishment shall continue until the amount that the creditor is seeking in the garnishment is paid in full. The garnishee shall determine whether the garnishee may become obligated to the debtor for earnings earned after the date of service. If it is unlikely that the garnishee will become so obligated, the garnishee shall send a statement of that fact to the creditor by the end of the 7th business day after receiving the earnings garnishment form under sub. (3). The creditor shall send a copy of this statement to the court within 7 business days after receipt of the statement.

AB354,4,25 (b) If the garnishee may become obligated to the debtor for earnings earned within pay periods beginning after the date of service, but one or more earnings garnishments against the debtor have already been served on the garnishee and not terminated, the garnishee shall retain the earnings garnishment form and place the garnishment into effect the pay period after the last of any prior earnings garnishments terminates. The garnishee shall notify the debtor of the amount of the garnishment and shall notify the creditor of the amount owed on the pending garnishments by the end of the 7th business day after receipt of the garnishment form under sub. (3). If before the earnings garnishment takes effect the garnishee determines that it is unlikely that the garnishee will continue to be obligated to the debtor for earnings, the garnishee shall notify the creditor and court under par. (a) within 7 business days after making that determination.

AB354, s. 7 Section 7. 812.40 of the statutes is amended to read:

AB354,5,14 812.40 Stipulated extension. At any time while an earnings garnishment is in effect, the debtor and creditor, if the debtor is an adult or emancipated minor, may stipulate in writing to an extension of the earnings garnishment for additional pay periods. The extension may commence on the first day after the earnings garnishment ends and shall end within 13 weeks after the last day of the last pay period affected by the earnings garnishment. The garnishee shall be bound by the extension if a copy of the stipulation is delivered or mailed to the garnishee, together with an additional garnishee fee under s. 812.33, before the last day of the last pay period affected by the earnings garnishment or any prior stipulated extension of the earnings garnishment. A stipulated extension is void and the garnishee fee shall be refunded if, prior to the last day of the last pay period affected by the earnings garnishment, the garnishee is served under s. 812.35 (3) by a creditor seeking to satisfy a different judgment against the debtor.

AB354, s. 8 Section 8. 812.44 (3) (form) of the statutes is amended to read:

AB354,5,16 812.44 (3) (form)

AB354,5,17 STATE OF WISCONSIN

AB354,5,18 CIRCUIT COURT:.... County

AB354,5,20 A.B., Creditor

AB354,5,21 vs. File or Reference Number....

AB354,5,22 C.D., Debtor EARNINGS

AB354,5,23 and GARNISHMENT

AB354,5,24 E.F., Garnishee

AB354,6,1 THE STATE OF WISCONSIN, To the garnishee:

AB354,6,3 The creditor has been awarded a court judgment that has not been paid. As a result, the creditor claims that a total of $.... is owed by the debtor, as follows:

AB354,6,4 A. Unpaid balance on judgment $....

AB354,6,5 B. Unpaid postjudgment interest $....

AB354,6,6 C. Costs of this earnings garnishment

AB354,6,7 (estimated) $....

AB354,6,8 TOTAL $....

AB354,6,11 The creditor believes that you will owe the debtor for earnings within the next 13 weeks, or if the debtor is an unemancipated minor, within any time. If the $15 fee is tendered with these papers, you are directed by the court to do the following:

AB354,6,12 DETERMINE WHETHER YOU WILL

AB354,6,13 OWE THE DEBTOR EARNINGS

AB354,6,16 1. Determine if you are likely to owe the debtor for earnings in pay periods beginning within the next 13 weeks, or if the debtor is an unemancipated minor, within any time.

AB354,6,20 2. If you are not likely to owe the debtor for earnings in pay periods beginning within the next 13 weeks, or if the debtor is an unemancipated minor, within any time, send a statement stating that fact to the creditor by the end of the 7th business day after receiving the earnings garnishment forms.

AB354,6,21 IF THE DEBTOR SENDS YOU AN ANSWER

AB354,6,25 3. Whenever you receive a debtor's answer form from the debtor, mail a copy of the answer form to the creditor by the end of the 3rd business day after receipt of that form. Include the date you received the answer form on the copy sent to the creditor.

AB354,7,3 4. If the debtor's answer form claims a complete exemption or defense, do not withhold or pay to the creditor any part of the debtor's earnings under this garnishment unless you receive an order of the court directing you to do so.

AB354,7,4 MULTIPLE EARNINGS GARNISHMENTS

AB354,7,12 5. If the debtor's earnings are already being garnisheed when you receive this earnings garnishment, place this earnings garnishment into effect the pay period after the last of any prior earnings garnishments terminates. Notify the debtor of the amount of the garnishment and notify the creditor of the amount owed on the pending garnishments by the end of the 7th business day after you receive these forms. If there are no prior pending earnings garnishments against the debtor's earnings, place this earnings garnishment into effect the pay period after you receive it.

AB354,7,13 EARNINGS GARNISHMENTS LAST 13 WEEKS,

AB354,7,14 EXCEPT FOR PUBLIC EMPLOYEES

AB354,7,24 6. The garnishment of the earnings of employees of the state of Wisconsin and its political subdivisions and of unemancipated minors remain in effect until the judgment is satisfied. The garnishment of earnings of other employees will affect the debtor's earnings for all pay periods beginning within 13 weeks after you receive it, unless the debtor's earnings are already being garnisheed. If this earnings garnishment is delayed under paragraph 5, above, it will affect the debtor's earnings for all pay periods beginning within 13 weeks after the first day of the pay period that you put this earnings garnishment into effect. If the amount claimed by the creditor is fully paid before the end of the 13 weeks, this earnings garnishment will terminate at that point.

AB354,7,25 PAYING THE CREDITOR

AB354,8,3 7. Between 5 and 10 business days after each payday of a pay period affected by this earnings garnishment, pay the creditor 20% of the debtor's disposable earnings for that pay period. Payment is complete upon mailing.

AB354,8,4 EFFECT OF COURT-ORDERED

AB354,8,5 ASSIGNMENTS FOR SUPPORT

AB354,8,13 8. If the debtor has assigned his or her earnings for support by court order, those support payments take priority over this earnings garnishment. If 25% or more of the debtor's disposable earnings is assigned for support by court order, do not pay any part of the debtor's earnings to the creditor. Instead, send the creditor a statement of that fact by the end of the 7th business day after you receive these forms. If less than 25% of the debtor's earnings is assigned for support by court order, the amount the creditor must be paid is reduced so that the total of earnings assigned and garnisheed does not exceed 25% of the debtor's disposable earnings.

AB354,8,14 EXTENSIONS

AB354,8,22 9. The debtor and creditor may agree in writing to extend this earnings garnishment for additional pay periods beginning within 13 weeks after this earnings garnishment would otherwise terminate if the debtor is an adult or an emancipated minor. If you receive a written extension stipulation, and an additional garnishee fee for each extension, you must honor it unless a different garnishment against this debtor's earnings is served upon you before the extension takes effect. In that case, the extension is void and you must return the extension fee to the party who paid it to you.

AB354, s. 9 Section 9. 812.44 (4) (form) of the statutes is amended to read:

AB354,8,24 812.44 (4) (form)

AB354,8,25 STATE OF WISCONSIN

AB354,9,1 CIRCUIT COURT:.... County

AB354,9,3 A.B., Creditor

AB354,9,4 vs. File or Reference Number....

AB354,9,5 C.D., Debtor EXEMPTION NOTICE

AB354,9,6 and EARNINGS GARNISHMENT

AB354,9,7 E.F., Garnishee

AB354,9,9 To the debtor:

AB354,9,15 The creditor was awarded a judgment against you or your spouse by.... (County Circuit or Federal District) Court on the.... day of...., .... (year) That judgment not having been fully paid, the creditor has now filed a garnishment proceeding against your earnings from the garnishee. This means that the creditor is seeking to take some of your earnings to satisfy part or all of the judgment against you or your spouse.

AB354,9,16 The total amount of the creditor's claim is as follows:

AB354,9,17 Unpaid balance on judgment $....

AB354,9,18 Unpaid postjudgment interest $....

AB354,9,19 Costs:

AB354,9,20 a. Garnishment filing fee $....

AB354,9,21 b. Garnishee fee $....

AB354,9,22 c. Service of process (estimate) $....

AB354,9,23 TOTAL $....

AB354,10,3 By law, you are entitled to an exemption of not less than 80% of your disposable earnings. Your "disposable earnings" are those remaining after social security and federal and state income taxes are withheld.

AB354,10,4 Your earnings are completely exempt from garnishment if:

AB354,10,6 1. Your household income is below the federal poverty level. See the enclosed schedules and worksheet to determine if you qualify for this exemption.