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Garnish Wages - Please help my dad


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Hi Guys,

My dad just called me and is so upset, which really scares me, cuz his health is not the best, he has a bad heart, and does not need this stress. He confided in me that he is so scared, and just found out that a lawyer is starting to garnish his wages due to an old loan. He is so scared to tell my mom.

Here's the situation:

He took out a loan for $5,000 a few years ago, ran behind, and stopped paying about a year ago. He just heard from his boss, that his boss has a court order to garnish his wages - he says his entire check. My parents are barely surviving with my dad's regular check, this will hurt them so bad. My dad was never contacted by the lawyer himself, or the original creditor that his wages were to be garnished.

What should he do? Is it too late for a goodwill letter? Can we work out some kind of payment plan with them still? I think it is very unethical that he was never informed, but don't know the laws regarding that.

The loan was taken through Telcom Credit Union.

Any help would be so much appreciated. I'm really scared for him.

Thank you

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Before wages can be garnished there must always first be a judgment entered with a court. An entire paycheck cannot be garnished, at least not in Michigan. There is a pre-set formula that is used for determining how much can be deducted. Could it be that your dad was served with a Summons and Complaint and didn't respond? If so, then a Default Judgment was most likely entered. Your dad needs to find out more information. First, he needs to get a copy of the court order served on his employer. He then needs to contact the clerk of the court and find out when the judgment was entered, upon whom their records say the original Summons and Complaint were served, etc. He can try working out an alternative arrangement with the Credit Union. However, since he simply stopped paying on the loan and never contacted the credit union (at least that's the way it sounds), they may be reluctant to work with him, especially since it sounds as if they've already obtained a judgment and the right to garnish his wages. Probably wouldn't hurt to try, though. Also, encourage him to tell your mom about the situation. She may be upset at first, but I'm sure she'll understand. It will probably relieve the majority of his stress, just knowing that she knows and that he has no secrets from her.

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Hi Breathing,

Wouldn't a summons and complaint be a summons to court? So, that would mean he was served with a summons for court and never showed up? Then since he wasn't there, they would go ahead and enter a default judgement, is what you are saying correct? Would the summons come from the court or the attorney, or Telcom? I thought there were particular rules with serving a summons?

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Yes, a Summons and Complaint was most likely served on your father (of course, I don't know that for certain) and when he didn't respond with an Answer to the Complaint and didn't appear in court, the credit union was able to obtain a Default Judgment against him. When he didn't satisfy the judgment, they initiated wage garnishment proceedings. The Summons and Complaint would have been filed with the court, and the credit union would have hired a process server to serve it on your father. I'll have to check on proper service in Michigan if the defendant is not at home or does not pick up certified mail. If you suspect that maybe your dad was actually served, or received collection letters and calls from the credit union, try to coax it out of him so that we can help him properly.

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Okay, I just called him and told him he needed to be honest with me and tell me the truth. He admitted that he knew about the court date. They served a summons, but I guess my little brother signed for it. If my little brother signed for it, does that count as my dad having been served? If so, what should we do now? Is there any way to try and work it out with the court or with the creditor on how much is garnished every paycheck?

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little brother signing for him was probably okay service. Also, you cannot garnish without advance notice to the debtor, as teh law ( at least in NYS) allows the debtor to pay directly before teh creditor goes to the employer. Chances are, your dad is too embarassed to tell you everything.

One thing you should do is get all the information togather. Go to the courthouse and pull the case file. See when the judgment was entered and how. There may be grounds to vacate the judgment. You still have to defend the lawsuit, but you migh get the garnishment halted.

They cannot take all his paycheck. There is a floor which I believe is around @150.00. They cannot take more than 10%.

My advice: get the facts and go see a lawyer, see what the lawyer has to say.

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If my little brother signed for it, does that count as my dad having been served? If so, what should we do now? Is there any way to try and work it out with the court or with the creditor on how much is garnished every paycheck?
I'm also here in Michigan and should be able to answer your questions. Will most likely be tomorrow, though. There is a set formula in Michigan that is used for determining how much will be deducted from each paycheck. Since there is already a judgment the court would defer to the creditor as to any alternative payment arrangements. Like I said before, it doesn't hurt to try. Your dad may be able to get the creditor to agree to a lesser payment per month than if he were garnished, but they may insist on additional interest and/or other fees, which would make the total amount repaid greater over time. With garnishmnents they're able to tack on attorney's fees and the cost of administering the garnishment, so the amount paid via garnishment will also be much greater than the original amount owed. Is the plaintiff the credit union, or a collection agency for the credit union? Your dad can try to get the judgment vacated, but that will probably require hiring an attorney, and if money is already tight that might not be an option. If he knows he owes it, it's probably better to try to come to an agreement with the creditor for pay for deletion of the negative TL. Do you know if it's on his reports?
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I'd also recommend getting a copy of the original loan agreement from Dad. Examine it for any cross collateralization clauses - credit unions in particular are known to do this, sometimes making an unsecured loan in effect a secured one. Don't know if he has any checking or savings accounts with the CU, but I'd move 'em if possible.

Would definitely gather all info and find the dough to consult with an attorney.

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The section of the Michigan Court Rules which deals with proper service is as follows:

MCR 2.105

Michigan Compiled Laws Annotated Currentness

Michigan Court Rules of 1985

Chapter 2. Civil Procedure

Subchapter 2.100 Commencement of Action; Service of Process; Pleadings; Motions

RULE 2.105 PROCESS; MANNER OF SERVICE

(A) Individuals. Process may be served on a resident or nonresident individual by

(1) delivering a summons and a copy of the complaint to the defendant personally; or

(2) sending a summons and a copy of the complaint by registered or certified mail, return receipt requested, and delivery restricted to the addressee. Service is made when the defendant acknowledges receipt of the mail. A copy of the return receipt signed by the defendant must be attached to proof showing service under subrule (A)(2).

Whether or not your brother signing for the Summons and Complaint constitutes proper service may be up to a judge or jury to decide.

If you would like for me to PM you the entire MCR 3.101 (sets out in detail the garnishment procedure in Michigan), just let me know.

MCR 3.101 doesn't set out the formula used for calculating the exact amount to be deducted from each paycheck. However, on Monday, 11-8, I should have this information for you.

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This section of Michigan Compiled Laws Annotated may provide your dad with an alternative to having his wages garnished. Couldn't hurt to ask the plaintiff if they would be willing to work with him on this.

M.C.L.A. 600.6215

Michigan Compiled Laws Annotated Currentness

Chapter 600. Revised Judicature Act of 1961 (Refs & Annos)

Revised Judicature Act of 1961

Chapter 62. Installment Judgments (Refs & Annos)

600.6215. Hearing and order; stay of garnishment

Sec. 6215. (1) On the date set for the hearing, the plaintiff may cross-examine the moving party as to the facts set forth in the motion, and the judge may then enter an order requiring the defendant to pay to the clerk of the court or to the plaintiff direct, a certain sum of money weekly, biweekly, or monthly, to apply on the judgment.

(2) The order shall stay the issuance of any writ of garnishment for work and labor during the period that the defendant complies with the order. The order shall not stay garnishment if the defendant fails to comply with its terms.

HISTORICAL AND STATUTORY NOTES

2000 Main Volume

Source:

P.A.1961, No. 236, § 6215, Eff. Jan. 1, 1963.

C.L.1948, § 600.6215.

C.L.1970, § 600.6215.

P.A.1974, No. 297, § 1, Eff. April 1, 1975.

The 1974 amendment deleted "or justice" following "judge" in subsec. (1).

For effective date provisions of P.A.1974, No. 297, see the Historical Note following § 600.223.

Prior Laws:

P.A.1935, No. 106, § 4.

C.L.1948, § 691.714.

RESEARCH REFERENCES

2004 Electronic Update

Forms

Michigan Litigation Forms & Analysis § 51:23, In General.

Michigan Litigation Forms & Analysis § 51:27, Brief Supporting Motion.

Treatises and Practice Aids

Michigan Pleading and Practice § 75.41, In General.

M. C. L. A. 600.6215, MI ST 600.6215

Current through P.A.2004, No. 1-380

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Thanks everyone for your replies. I haven't been able to check the site for a little while. My dad saw the letter from to his boss, and they are going to be taking 25% of his gross earnings. I thought 10% was the limit? Does anyone have the link or info regarding wage garnishment limits in Michigan? I'm not very savvy on reading the legal writings, so if anyone has the cliff notes version, that would be very helpful. Sounds like my little brother signing for it would be good enough in Michigan. I guess it would be worth a try to fight it, but there is no money there to get a lawyer right now. That is the entire issue. My parents are barely making by with his whole paycheck, I don't know what they are going to do with 25% taken out!

From talking to my dad, it looks like the original creditor, the credit union, went directly the court/lawyer route and did not go with the CA. Would it be worth a try to contact them and try to make pmt arrangements? He also swears up and down that he was never contacted about the default judgement or whatever, so was never given a chance to try and pay it before wages were garnished.

I need to figure out what to tell him, cause his boss has to return the signed agreement by tomorrow afternoon. Any help is so much appreciated by both me and my dad. Thanks to everyone.

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Your dad can attempt to have the Writ for Garnishment rescinded and try to work out alternative arrangements with the credit union (see my post of 11/5). The credit union may be willing to work with him on this.

What your dad's boss has to submit by tomorrow is the Garnishee Defendant's Disclosure form. However, his boss can also request for an extension of time in which to file his disclosure. He would need to do that first thing tomorrow, though. Has your dad contacted the credit union yet? If not, he needs to do that ASAP. He can also request a copy of proof that the credit union's attorney provided him with all the appropriate notices. It's important for him to not be antagonistic, though -- more flies with honey than vinegar and all that. Not that I'm saying he would be antagonistic...but right now the credit union is holding all of the cards.

I think I promised to get you a sample copy of the Garnishment Disclosure form that shows the formula that is used for calculating how much can be deducted from your dad's wages. I'll try to PM that to you tomorrow. I think 25% of his net income might be right here in Michigan. I'll bet the credit union will be willing to work with him, though. Think positive.

I hope your dad's doing okay...we all know how stressful dealing with these types of situations can be. Has he confided in your mom yet? That will take a tremendous load off.

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Hi Breathing,

Sry, my stupid internet went out last nite. No, he hasn't told my mom yet, and he made me promise not to tell. I think he wants to try and work everything out for the best before telling her. He never called me last night, so I don't know what is happening today. I'm sure he will call me tonight, so I will give him your advice then. I am scared for him though, because he is not in the right health to be stressed out like that. With financial stresses, he is always stressed, but this is pretty bad.

It would be great if you could get me the legal stuff on what is the limit to take out. I would love to have that info.

Sincere thanks for all your help.

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