Wage Garnishment in North Dakota

Wage garnishment is about as fun as a January day in Fargo without a heavy winter jacket. Your wages can be garnished if a creditor gets a court order to address unpaid debt. This allows them to take money directly from your paycheck. Both federal and state laws limit how much of your check can be garnished. But not receiving your full paycheck can cause other financial issues, like not being able to make rent or pay your monthly mortgage.

This article will help you understand how wage garnishment laws work in North Dakota and what you can do about it if you live in the Peace Garden State. 

What Is Wage Garnishment?

Wage garnishment — sometimes called wage attachment — is a legal process creditors use to address unpaid debts by having wages withheld from your paycheck. Creditors must first bring a debt collection lawsuit in a North Dakota district court and win a court judgment before they can garnish a debtor’s wages or take money from their bank account. The amount they can take is limited by law.

Who Can Garnish Wages in North Dakota?

A creditor becomes a judgment creditor once the court or judge issues a money judgment. Only creditors with a valid court order can garnish wages in the state of North Dakota. This may be the original creditor you had the debt with or a debt buyer or debt collection agency.

Creditors for certain debts can garnish your wages without a court order. A creditor doesn’t need a money judgment to collect on:

• Unpaid federal taxes that are payable to the IRS or state taxes payable to the North Dakota Department of Revenue.

• Alimony or spousal support.

• Child support payments that are court ordered.

• Child support arrears.

• Federal student loans you’ve defaulted on.

That said, most creditors, including those for consumer debts like credit cards and private student loans, must get a court order before taking money from your paycheck.

North Dakota Garnishment Process

Step 1: The creditor brings a debt collection lawsuit against you.

If you haven’t paid a debt and the creditor or debt collector has tried other debt collection tactics, they can sue you. At the court proceedings, the creditor will show that there is a valid debt and that it hasn’t been paid. A debt buyer would show that they are the rightful owner of the unpaid debt. If a creditor sues you for an unpaid debt, you can dispute the debt collection lawsuit and may win. If you ignore the summons, the creditor will get a default judgment against you. Once a creditor gets a court order, they can work on collecting the debt through garnishment.

Step 2: The creditor serves you with a notice before the garnishment begins.

After the judgment creditor gets a money judgment in the initial debt collection lawsuit, they must serve you with a notice. This notice will tell you that the judgment creditor plans to pursue wage garnishment and that you should expect further communication. It’s wise to get organized and be prepared to respond to the paperwork that follows.

Step 3: The creditor serves you and your employer with paperwork.

Your employor is considered the garnishee in a wage garnishment case. A judgment creditor must serve a garnishee summons on your employer 10 days after the notice before garnishment. This paperwork advises your employer of their responsibility to withhold money from your paycheck, the maximum amount to be withheld, and other information. You, the judgment debtor, should also get a copy of this paperwork.

Step 4: You can file an objection, notify the court of exemptions, and indicate dependent deductions.

After receiving the garnishee summons, you’ll want to act fast. If you have dependent family members in your household, you’ll want to file a verified list of dependents with the garnishee, (your employer) within 10 days of getting the garnishee summons. You should include information on your dependents, including their Social Security numbers.

You may have income sources in addition to your regular wages. Some income is exempt or protected from garnishment by creditors, including:

• Welfare or public assistance checks

• Social Security checks

• Unemployment benefits

• Veterans benefits

• Child support and alimony income

• Workforce insurance

If the wage garnishment is to collect on child support rather than a consumer debt, though, these items are not exempt. If non-wages will be garnished and you have an exemption, you’ll want to inform the judgment creditor and the garnishee within 20 days of receiving the garnishee summons.

Otherwise, if you believe there was an error in the wage garnishment order, the notice provided, or the jurisdiction, you’ll want to object to the garnishee summons within 20 days. If you object, there is a hearing to show cause and you may make an argument to the court.

Step 5: The garnishment begins.

Once the judge rules on relevant objections, exemptions, and dependent deductions, garnishment can begin. This can happen as soon as 20 days after the garnishment summons is served. It cannot occur any later than 360 days from the service of the garnishee summons. Valid objections include things like you already discharged the debt in bankruptcy, you are in a payment plan already and you haven’t defaulted, or your exemptions have been overlooked.

One garnishment beings, the garnishee will hold back a portion of your paycheck and give it directly to the judgment creditor to pay down the outstanding judgment debt. Once the debt is paid off, the judgment creditor must file a satisfaction of judgment form, releasing the garnishee from their responsibilities. 

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

The amount of money that can be garnished from your paycheck is limited by federal law. As you probably know, state and federal income taxes, Social Security, and Medicare are taken off the top from your gross pay. The remaining amount is considered your disposable income or earnings. Only your disposable earnings can be garnished.

North Dakota follows federal law in terms of how much of your disposable income can be garnished by a creditor. Creditors can garnish whichever is less:

• 25% of your weekly disposable income, or 

• The amount by which your weekly income exceeds 40 times the federal minimum wage. This is currently $7.25/hour and 40 times that is $290. If your weekly income is less than $290, your wages can’t be garnished.

So say for example that your weekly disposable income is $500. 

• 25% of $500 is $125.

• Your weekly income exceeds $290 by $210 ($500 - $290 = $210). 

• he lesser amount is $125, so the maximum your wages could be garnished in this example is $125 each workweek.

How To Stop a Garnishment in North Dakota

Under federal law, you can’t be fired if you have one wage garnishment. You can be terminated from employment under North Dakota and federal law if you have more than one wage garnishment. This may leave you wondering how you can stop a garnishment. There are two main ways: You either pay off the debt or get it discharged in bankruptcy. You can pay the debt by contacting the creditor directly and offering a lump-sum payment if that’s possible for you. Or you can try to negotiate a debt settlement or just let the garnishment play out.

If you’re drowning in debt and can’t catch up, you may want to hit the reset button by filing bankruptcy. When you file, the court issues an automatic stay, which stops collection activities, including wage garnishment, while your bankruptcy case is pending. You can protect some of your assets during bankruptcy. Only North Dakota bankruptcy exemptions are recognized in this state, not federal exemptions. That said, North Dakota exemptions provide decent protections for things like personal property, real estate, and cars.

If you’re considering filing Chapter 7 bankruptcy, you may be able to file for free upswing Upsolve’s online filing tool. If you’d like legal advice or your bankruptcy case is complicated, having a consultation with a bankruptcy attorney can help you figure out a game plan.

Are There Any Resources for People Facing Wage Garnishment in North Dakota?

There are several nonprofit legal aid organizations and government resources that provide information and help to those who need it in North Dakota. Check out the following links to get up to speed when you’re facing wage garnishment:

• North Dakota State Civil Court provides a guide for judgment debtors.

• Legal Services of North Dakota is a legal aid organization that has information on what to do if you're sued, the wage garnishment process, and exemptions.

• Upsolve keeps a list of legal aid organizations in North Dakota.