SB327: Bill Text

LRB-3208/1

KRP:cdc

2023 - 2024 LEGISLATURE

2023 Senate BILL 327

June 7, 2023 - Introduced by Senators Hutton, Cabral-Guevara, Wanggaard, Ballweg and Stroebel, cosponsored by Representatives Tusler, Allen, Behnke, Conley, Gustafson, Kitchens, Murphy, O'Connor, Penterman, Rettinger, Rozar, Spiros and Wichgers. Referred to Committee on Labor, Regulatory Reform, Veterans and Military Affairs.

SB327,1,6 An Act to repeal 812.40, 812.405 and 812.42 (2) (b); to renumber and amend 812.39 (1) and 812.39 (2); to amend 812.33 (1), 812.35 (5), 812.35 (6), 812.38 (2), 812.44 (3) and 812.44 (4); and to create 812.39 (1) (a), 812.39 (1) (b), 812.39 (1) (c), 812.39 (2) (b), 812.39 (2m) and 812.395 of the statutes; relating to: eliminating the 13-week limit on the garnishment of earnings of certain debtors.

Analysis by the Legislative Reference Bureau

This bill eliminates the 13-week limit imposed on the garnishment of earnings of certain debtors. Under current law, a creditor may file a garnishment notice with a court and pay a fee to a garnishee for the purpose of collecting an unsatisfied judgment for money damages from earnings owed to the debtor by the garnishee. Current law limits the number of weeks in which the earnings of a debtor, other than a debtor who is an employee of the state or a political subdivision of the state, may be garnished to 13 weeks.

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

SB327,1 Section 1. 812.33 (1) of the statutes is amended to read:

SB327,2,5 812.33 (1) The creditor shall pay a $15 fee to the garnishee for each earnings garnishment or each stipulated extension of that earnings garnishment, except that there is no fee for a garnishment to satisfy an order for restitution under s. 973.20 (1r). This fee shall be included as a cost in the creditor's claim in the earnings garnishment.

SB327,2 Section 2. 812.35 (5) of the statutes is amended to read:

SB327,2,13 812.35 (5) Upon 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.

SB327,3 Section 3. 812.35 (6) of the statutes is amended to read:

SB327,3,12 812.35 (6) 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 that one or more earnings garnishments are in effect against the debtor by the end of the 7th business day after receipt of the garnishment form under sub. (3). Unless s. 812.39 (2) or (2m) applies to the debtor, the garnishee shall recalculate the amount to pay to each creditor for which an earnings garnishment remains in effect using the procedure under s. 812.39 (1). If s. 812.39 (2) or (2m) applies, the garnishee shall recalculate the amount to pay to each creditor for which an earnings garnishment remains in effect using the procedure under s. 812.39 (2) or (2m), whichever applies. After making the recalculation required under this subsection, the garnishee shall, subject to the exemption under s. 812.34 (2) and the limits under s. 812.39 (2) and (2m) on the total earnings that may be garnished, place the garnishment into effect for the pay period falling after the 7th business day after receipt of the garnishment form. 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.

SB327,4 Section 4 . 812.38 (2) of the statutes is amended to read:

SB327,3,25 812.38 (2) A motion or petition under sub. (1) may be made at any time during the pendency of the earnings garnishment. Within 5 business days after a motion or petition is filed under sub. (1), the court shall schedule the matter for a hearing to be held as promptly as practicable. The court shall notify the parties of the time and place of the hearing. Upon conclusion of the hearing, the court shall make findings of fact and conclusions of law. The court shall make such order as required by these findings and conclusions. If the order permits the garnishment to proceed, the date on which the order is served upon the garnishee shall substitute for the original date of service of the garnishment upon the garnishee under s. 812.35 (3) for the purpose of determining any 13-week period under s. 812.35 (5) or (6). A court order shall bind the garnishee from the time the order is served upon him or her the garnishee.

SB327,5 Section 5. 812.39 (1) of the statutes is renumbered 812.39 (1) (intro.) and amended to read:

SB327,4,11 812.39 (1) (intro.) Between 5 and 10 business days after the payday of each pay period in which the debtor's earnings are subject to the earnings garnishment, the garnishee shall, subject to the exemption under s. 812.34 (2) and except as provided in subs. (2) and (2m), pay the creditor that portion of the debtor's nonexempt disposable earnings to which the creditor is entitled. If the debtor's earnings are already being garnished by one or more earnings garnishments when the garnishee is served under s. 812.35 (3) (b) by a creditor with a garnishment form to recover an amount owed by that debtor, the garnishee shall, subject to the exemption under s. 812.34 (2) and except as provided in subs. (2) and (2m), do all of the following:

SB327,6 Section 6. 812.39 (1) (a) of the statutes is created to read:

SB327,4,13 812.39 (1) (a) Determine 20 percent of the debtor's disposable earnings.

SB327,7 Section 7. 812.39 (1) (b) of the statutes is created to read:

SB327,4,16 812.39 (1) (b) Divide the quotient under par. (a) by the total number of creditors.

SB327,8 Section 8. 812.39 (1) (c) of the statutes is created to read:

SB327,4,18 812.39 (1) (c) Pay each creditor the amount determined under par. (b).

SB327,9 Section 9. 812.39 (2) of the statutes is renumbered 812.39 (2) (a) and amended to read:

SB327,5,8 812.39 (2) (a) Court-ordered assignments of the debtor's earnings for support or maintenance under ch. 767, regardless of the date the garnishee first receives notice of the assignment, take priority over an earnings garnishment under this subchapter. If and take priority over a garnishment to satisfy an order for restitution under s. 973.20 (1r). Except as provided in par. (b), if the debtor's earnings are subject to assignment under s. 767.75, the creditor, including a creditor entitled to an earnings garnishment to satisfy an order for restitution under s. 973.20 (1r), shall not be entitled to an amount greater than 25 percent of the debtor's disposable earnings less the amount assigned under s. 767.75. If the garnishee determines that the amount to be garnished pursuant to an order under s. 767.75 is equal to or greater than 25 percent of the debtor's disposable earnings, the garnishee shall notify the creditor and the court under s. 812.35 (5) within 7 business days after making that determination.

SB327,10 Section 10. 812.39 (2) (b) of the statutes is created to read:

SB327,5,13 812.39 (2) (b) If one or more earnings garnishments are in effect for a debtor whose earnings are subject to assignment under s. 767.75, the garnishee shall, if the amount assigned under s. 767.75 is less than 25 percent of the debtor's disposable earnings, do all of the following:

SB327,5,15 1. Determine the difference between 25 percent of the debtor's disposable income and the sum of the following:

SB327,5,16 a. The amount assigned under s. 767.75.

SB327,5,18 b. The amount, if any, to be garnished to satisfy an order for restitution under s. 973.20 (1r).

SB327,5,21 2. a. If the difference determined under subd. 1. is less than 25 percent of the debtor's disposable income, divide the difference under subd. 1. by the number of creditors.

SB327,5,22 b. Pay each creditor the amount determined under subd. 2. a.

SB327,5,25 3. If the difference determined under subd. 1. is 25 percent or more of the debtor's disposable income, notify the creditor and court under s. 812.35 (5) within 7 business days after making that determination.

SB327,11 Section 11. 812.39 (2m) of the statutes is created to read:

SB327,6,9 812.39 (2m) (a) Court-ordered garnishment of the debtor's earnings to satisfy an order for restitution under s. 973.20 (1r), regardless of the date the garnishee first receives notice of the court-ordered garnishment, takes priority over an earnings garnishment under this subchapter. Subject to sub. (2), and except as provided in pars. (b) and (c), if the debtor's earnings are subject to garnishment under s. 973.20 (1r), the creditor shall not be entitled to an amount greater than 20 percent of the debtor's disposable earnings less the amount to be garnished pursuant to court order under s. 973.20 (1r).

SB327,6,12 (b) If one or more earnings garnishments are in effect for a debtor who owes restitution under s. 973.20 (1r), the garnishee shall, subject to sub. (2) and except as provided in par. (c), do all of the following:

SB327,6,15 1. Determine the difference between 20 percent of the debtor's disposable income and the amount to be garnished to satisfy an order for restitution under s. 973.20 (1r).

SB327,6,16 2. Divide the difference under subd. 1. by the number of creditors.

SB327,6,17 3. Pay each creditor the amount determined under subd. 2.

SB327,6,21 (c) If the garnishee determines that the amount to be garnished pursuant to court order under s. 973.20 (1r) is equal to or greater than 20 percent of the debtor's disposable earnings, the garnishee shall notify each creditor and court under s. 812.35 (5) within 7 business days after making that determination.

SB327,12 Section 12 . 812.395 of the statutes is created to read:

SB327,7,2 812.395 Garnishment of earnings remains in effect; notice to debtor. (1) A garnishment of earnings payable to a debtor, including a debtor who owes victim restitution ordered under s. 973.20 (1r), remains valid and effective until the judgment is satisfied, unless sooner terminated by order of the court.

SB327,7,9 (2) For a garnishment of earnings that extends beyond a 13-week period, following the first 13-week period the creditor shall, at least 3 business days before the payday of the first pay period of each subsequent 13-week period during the effective period of a garnishment and until the judgment is satisfied or the garnishment is terminated by order of the court, serve the earnings garnishment form issued by the clerk of courts under s. 812.35 (2) upon the debtor by one of the following means:

SB327,7,10 (a) First class mail.

SB327,7,11 (b) Certified mail, return receipt requested.

SB327,7,13 (c) Any means permissible for the service of a summons in a civil action, other than publication.

SB327,13 Section 13. 812.40 of the statutes is repealed.