Wage Garnishment in Arkansas

If you’ve just received a wage garnishment order in Arkansas, you’ll find a big chunk of your paycheck missing. This can put you in a financial situation where you can’t pay your other bills, which could quickly lead to serious issues like eviction or foreclosure. The article will answer those questions, including what procedures creditors must follow to garnish your wages, how much they can take from your paycheck, and any exemptions you may have. This article also discusses what you can do to stop a garnishment in the Natural State.

What Is Wage Garnishment?

A wage garnishment is when a creditor takes money out of your paycheck to address a past-due debt. For consumer debts such as credit card debts and medical bills, creditors have to sue you and win the lawsuit before they can garnish your wages. Then, they need to get a court order allowing the garnishment. If the judge issues a writ of garnishment — also called a garnishment order — to your employer, the employer must take the money from your paycheck. Creditors can’t take your entire paycheck though. The amount they can garnish is limited by state law.

Who Can Garnish My Wages in Arkansas?

For consumer debts, any creditor with a valid court judgment can garnish your wages. This includes the original creditor, debt collectors, and debt buyers. Creditors collecting on other types of debt like federal or state taxes, domestic support orders, or federal student loans can also garnish your wages, but they follow different procedures. Taxing authorities and federal student loan creditors don’t have to go to court to garnish your wages. And domestic support garnishments such as child support or alimony are issued by family courts. The remainder of this article will focus on wage garnishments by consumer creditors.

Arkansas Wage Garnishment Process

Consumer creditors must go through several steps before they can garnish your paycheck. 

1. First, the creditor has to sue you and serve a summons and complaint on you. A sheriff’s deputy or process server will usually serve these documents. Creditors can also serve these documents via certified mail.

2. After you’re served, you’ll usually have 30 days to file an answer with the court. It’s important to do this. If you fail to answer, the creditor may get a default judgment against you. This is the same as losing at trial. If you have a defense, you need to raise it in your answer. A valid defense could eliminate or reduce the plaintiff’s claim against you. Some common defenses include:

   1. The plaintiff’s lawsuit is invalid because it violates the statute of limitations

   2. That the plaintiff violated the Fair Debt Collection Practices Act (FDCPA)

   3. That you have been misidentified due to identity theft.

3. If you go to trial, the judge will hear your case before making a decision. You might be surprised how often individuals win against debt collectors. If the consumer creditor — also called the judgment creditor — successfully gets a court judgment against you, it may then request a writ of garnishment from the court.

4. Your employer — also known as the garnishee — will then be served with the garnishment order. If your employer doesn’t comply with the writ of garnishment, they will have to appear in court. The employer must continue to withhold the calculated amount and send it to the creditor until the debt is fully paid or you’re no longer an employee or you’ve filed bankruptcy.

Under federal wage garnishment law, you can’t be fired for having a garnishment against you. But federal law doesn’t protect you from termination if you have more than one garnishment judgment against you in a 12 month period. Arkansas state law protects employees from termination if they have more than one Arkansas garnishment and one of those garnishments is a child support obligation.

How Much of My Paycheck Can Be Taken by Wage Garnishment?

Federal and state laws limit how much of your wages can be garnished. And some forms of income are exempt from garnishment. The federal and state exemptions are different, and you can choose which to use. In Arkansas, federal law is often the better choice. Under federal law, creditors can deduct whichever is less:

• 25% of your weekly disposable income, or

• The amount your weekly disposable income exceeds $217.50, which is 30 times the federal minimum wage of $7.25/hour.

Your disposable earnings are what’s left after legally required deductions are made like payroll taxes. Though you may have union dues and 401(k) contributions deducted from your paycheck, these are not legally required so they are part of your disposable income. No matter how much is deducted, the total amount garnished can’t exceed the judgment. This may include the original past-due debt as well as fees, costs, and interest.

Here are two examples that illustrate how these formulas work.

Federal Wage Garnishment Exemptions

In Example 1, where the employee has disposable earnings of $500 per week, the 25% rule is used since $125 (25% of $500) is less than $282.50 ($500 minus $217.50). In Example 2, the employee has disposable earnings of $250.00 per week. Here, the 30 times minimum wage rule is used. That’s because $32.50 ($250 - $217.50) is less than $62.50 (25% of $250).

Under Arkansas law, if you’re a mechanic or laborer you can exempt the first 60 days of your wages as long as it’s less than the personal property exemption. That personal property exemption is $500 if you’re married or head of household. Otherwise, the exemption is $200. You would need to consult with an Arkansas attorney to determine if there’s anything this law can do for you. It may be useful only in extremely rare circumstances.

All creditors are limited in how much of your wages they can take, but those limitations vary.  A much higher percentage of your paycheck can be garnished to repay taxes and domestic support obligations than what can be garnished for consumer debts. On the other hand, the maximum amount that can be garnished to collect on past-due federal student loans garnishment is lower than the amount for consumer debts.

Consumer creditors can’t garnish certain government benefits such as Social Security, veterans benefits, and workers’ compensation. 

How To Stop a Garnishment in Arkansas

In Arkansas, creditors can continue to garnish your wages as long as there’s a judgment in effect. A judgment creditor can continue to collect on a judgment for 10 years before renewing the judgment. They can keep renewing the judgment every 10 years and attempting to collect the debt until it’s paid in full.

While it’s likely not possible, you can stop the garnishment by paying the debt in full or negotiating a settlement with the creditor. You can also ride out the garnishment until the debt is fully paid. Understandably, neither of these options is very appealing.

For many people, the best way to stop wage garnishments is to file for bankruptcy. Once you file, an automatic stay goes into effect. This stops the garnishment immediately as well as any other debt collection activities. As long as the debt is dischargeable, the garnishment will never come back. For many people, bankruptcy is the best debt relief solution available. 

For a simple straightforward Chapter 7 bankruptcy, Upsolve provides a free tool that will allow you to file your own bankruptcy without having to pay expensive attorneys fees. For more complicated Chapter 7 bankruptcies or Chapter 13 bankruptcies, you may want to consult with an experienced attorney in your area.

Useful Resources if You’re Facing a Wage Garnishment in Arkansas

Arkansas has several legal aid services you can turn to if you're subject to garnishment and need legal assistance. For more information, see the sites below:

• Arkansas Legal Services Online provides self-help forms, an online library, a helpline, and access to legal services for low-income individuals and families.

• The Center for Arkansas Legal Services has eight offices located across Arkansas.

• The Arkansas Attorney General’s office has a useful Guide to Small Claims Court, which touches on wage garnishment.

• The American Bar Association has a free legal resources page.

• Upsolve.org has more information on wage garnishment, debt relief, and bankruptcy.