New Georgia Wage Garnishment Law Takes Effect

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The State of Georgia has a new wage garnishment law that took effect this month.  The law was passed by the Georgia legislature in March and was signed by Georgia Governor Nathan Deal on April 12, 2016. It became effective 30 days after it was signed by the Governor.

In September of 2015 the prior law was declared unconstitutional. The ruling in the case, (Strickland v. Alexander, No. 1:12-CV-02735-MHS) had essentially put a halt to garnishments in Georgia.

The Strickland case was filed after creditors garnished Tony Strickland’s Social Security income and money from his workers’ compensation settlement. The court’s opinion outlined a tragic set of health problems for Mr. Strickland that led to Mr. Strickland receiving a lump-sum workers’ compensation settlement for injuries sustained on his job and also Security Disability payments. Mr. Strickland and his spouse had used these funds for basic living and healthcare expenses.

A portion of those funds were frozen as part of a garnishment of Mr. Strickland’s savings account after a judgment was obtained for a balance owing on a delinquent credit card account.

In declaring the old law unconstitutional, U.S. District Court Judge Marvin H. Shoob determined: “The law is flawed because it doesn’t require creditors to tell debtors that some money — like Social Security benefits, welfare payments and workers’ compensation — is off limits to garnishments. When that money is wrongly taken, the law doesn’t require creditors to tell people how to get it back, and it doesn’t provide a timely procedure for determining whether funds should have been exempt.”

In theory the Strickland decision only applied in Gwinnett County where the suit was filed. However, other Georgia Counties had stopped accepting garnishments while they waited for the Georgia Legislature to respond to the ruling.

The new law dealt with the issues identified in the Strickland case. As noted in the above excerpt from Judge Shoob’s opinion, the state’s previous garnishment law didn’t require creditors to tell debtors that some money, like Social Security benefits, welfare payments, and workers’ compensation was off-limits to garnishments.

The new law also helps to clarify what money in accounts is exempt and explains how quickly it can be recovered if it is taken improperly. It outlines what a judgment debtor should do if exempt money has been taken. It also explains the potential remedies judgment debtors would have. The new law requires that a hearing should be held no more than 10 days after an exemption claim is filed. Finally, the new law requires debtors to be notified about what money can’t be taken and what appeals are available.

insideARM Perspective

The new law is a positive for both sides.  The law provides greater protections for consumers and, theoretically, will ensure a speedy and simplified process to dispute garnishment of exempt funds.

On the other side of the fence, judgments creditors in Georgia will now be able to again pursue an important post-judgment remedy. For them, the 8-month wait between the September 2015 ruling and the effective date for the new law is now over.

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Posted in Collection Laws and Regulations, Georgia, State Licensing .

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