You're sitting at your desk, minding your own business, when a thick envelope from a local court arrives. Or maybe you're an employer opening the mail to find a legal order demanding you divert a chunk of your star developer's paycheck to a debt collection agency. In both scenarios, a specific legal term starts flying around: the garnishee. It sounds like a garnish for a fancy steak, but honestly, it’s much more stressful.
Most people assume the person who owes money is the star of this legal drama. They aren't. In the world of debt collection and judgment enforcement, the "judgment debtor" is the one who owes the cash. The "judgment creditor" is the person or bank trying to get paid. So, who is the garnishee?
The garnishee is the third party.
Think of them as the middleman caught in the crossfire. They are a neutral entity that happens to be holding onto money or property that belongs to the debtor. Usually, this is an employer or a bank. They don’t owe the debt themselves, but the law suddenly tells them they can't give that money to the person it belongs to. Instead, they have to send it to the court or the creditor. It's a weird, high-stakes game of "keep away" mandated by the government.
Why the Garnishee Matters More Than You Think
When a court issues a writ of garnishment, the garnishee is legally stuck. You can't just ignore it. If a bank—acting as the garnishee—receives a notice but lets the customer withdraw all their funds anyway, that bank might end up on the hook for the entire debt. It’s a brutal reality of the legal system. The garnishee becomes a temporary custodian of funds under legal duress.
The relationship is usually pretty simple:
- The Debtor owes money to the Creditor.
- The Garnishee (the bank or boss) owes money to the Debtor (as wages or account balance).
- The Court tells the Garnishee to pay the Creditor instead.
It’s efficient. It’s cold. And for the garnishee, it’s a giant administrative headache.
The Employer as the Unwilling Protagonist
Most garnishments happen at the workplace. If you’re a business owner, you’re the garnishee the moment a wage attachment hits your desk. You didn't ask for this. You probably like your employee. But if you don't calculate the withholding correctly based on federal and state limits—like those set by the Consumer Credit Protection Act (CCPA)—you’re looking at legal penalties.
📖 Related: Average Uber Driver Income: What People Get Wrong About the Numbers
The CCPA is pretty strict. Generally, it limits garnishment to 25% of "disposable earnings" or the amount by which weekly earnings exceed 30 times the federal minimum wage. Whichever is less. If you’re the garnishee and you take too much, you’re violating federal law. If you take too little, the creditor might sue you for the difference. It’s a tightrope.
Banks: The Most Common Garnishees in the Wild
Banks are the ultimate garnishees. They handle thousands of these orders daily. When a creditor gets a "non-earnings" garnishment, they go straight for the checking account. The bank has to freeze the funds immediately. This is where things get messy for the average person.
Imagine waking up on a Tuesday and your debit card is declined at the grocery store. You check your app. Your balance is $4,000, but your "available balance" is $0. The bank, acting as the garnishee, has locked the funds.
However, banks have to follow specific rules regarding "protected" funds. Under 31 CFR Part 212, banks must perform an account review before freezing money. If they see Social Security benefits, VA benefits, or Supplemental Security Income (SSI) deposited within the last two months, that money is usually "off-limits" to the creditor. If a bank fails to protect these funds, they aren't just a bad garnishee—they're breaking federal regulations.
What Happens if the Garnishee Refuses to Comply?
Resistance is expensive.
If a company receives a garnishment order and says, "Nah, we like Steve, we're going to keep paying him his full salary," the creditor will move for a "judgment against the garnishee." This is the nightmare scenario. Now, the employer is legally responsible for Steve's $15,000 credit card debt. The debt effectively transfers from the employee to the business because the business failed its duty as a garnishee.
Courts don't play around with this. The writ of garnishment is a court order. Disobeying it is essentially contempt.
👉 See also: Why People Search How to Leave the Union NYT and What Happens Next
Does the Garnishee Get Paid for Their Trouble?
Kinda. In many states, the garnishee is allowed to collect a small fee for the administrative costs of processing the garnishment. We're talking maybe $10 to $25. It nowhere near covers the time your HR department or accountant spends dealing with the paperwork, but it’s a token gesture from the legal system.
In some jurisdictions, like Nevada or Florida, the rules for garnishee fees vary wildly. Some states require the creditor to pay the garnishee an upfront fee just to answer the "garnishee disclosure" (the form where the garnishee admits they have the debtor's money).
Common Misconceptions About the Garnishee Role
People often get angry at the garnishee. If your bank freezes your account, you yell at the teller. If your boss takes 25% of your check, you glare at the payroll manager. But honestly, they have zero choice.
- The garnishee isn't the judge. They can't decide the debt is unfair or that you’ve already paid it. They just follow the paper.
- The garnishee doesn't keep the money. They are a pass-through.
- The garnishee can't fire you (usually). Under federal law, an employer cannot fire an employee because their earnings have been subjected to garnishment for any one indebtedness. However, if you have three different creditors garnishing you at once, that federal protection starts to get real thin.
When Things Get Weird: Safe Deposit Boxes and Real Estate
While wages and bank accounts are the "greatest hits" of garnishment, the term garnishee can apply to anyone holding property. Sometimes this includes a storage unit facility or even a jeweler holding a watch for repair.
If you have a safe deposit box, the bank is the garnishee for the contents of that box. The creditor can't just walk in and take your grandma's diamonds, but they can get a court order forcing the bank to open the box in the presence of a sheriff. The bank, as the garnishee, just stands there and facilitates the process.
The Garnishee’s Disclosure: The Moment of Truth
Once a garnishee receives the writ, they have a deadline—usually 7 to 21 days—to file a "Garnishee Disclosure" or "Answer."
This is a formal document where the garnishee tells the court:
✨ Don't miss: TT Ltd Stock Price Explained: What Most Investors Get Wrong About This Textile Pivot
- "Yes, I owe this person money" or "No, I don't."
- "Here is exactly how much I am holding."
- "Here is when I expect to pay them next."
If the garnishee lies on this form, they’re committing perjury. If they say they aren't employing someone when they actually are, the creditor’s lawyer will eventually find out through tax records, and then the garnishee is in deep trouble.
Strategies for Dealing With a Garnishment Order
If you find out you are the garnishee, or if you're the debtor wondering who is the garnishee in your specific case, you need to act fast.
For the Garnishee (the business/bank):
Immediately notify the debtor. Most states require you to send a copy of the garnishment to the employee or account holder. Then, verify the math. Don't just guess on the withholding amounts. Use a payroll calculator specifically designed for garnishment limits.
For the Debtor:
The moment you see a garnishee involved, your window for negotiation is closing. You can file a "Claim of Exemption." This is your chance to tell the court that the money being held is needed for basic necessities like rent or medical care. If the garnishee is your bank, you must act within days, or the money will be sent to the creditor and it's basically gone forever.
The Future of Garnishment and Digital Assets
We're entering a weird era with crypto. Can a crypto exchange be a garnishee?
Legal experts are currently debating this in courts across the country. If you have $50,000 in Bitcoin on a centralized exchange like Coinbase, that exchange functions very much like a bank. Creditors are already serving writs of garnishment to these exchanges. If the exchange is based in the U.S., they have to comply. They become the garnishee, freeze your "hot wallet," and prepare to liquidate for the creditor.
Self-custody wallets (where you hold your own private keys) are a different story. In that case, there is no third-party garnishee to serve. The creditor is stuck. They can't order a piece of software to "hand over the money" if there's no human or corporation in the middle to receive the order.
Actionable Steps If You're Involved in a Garnishment
Whether you are the one being garnished or the one being forced to act as the garnishee, the clock is ticking. Legal timelines in these cases are notoriously short.
- Audit the Writ: Check for the correct name and Social Security number. It sounds basic, but "John Smith" garnishments hit the wrong people more often than you’d think. If you’re the garnishee and you freeze the wrong person's account, you're liable for the damages.
- Calculate Disposable Income: If you're an employer, remember that "disposable" isn't what's left after the employee pays their rent. It’s what’s left after legally required deductions like taxes and Social Security. 401(k) contributions and health insurance premiums usually don't count as "required" in the eyes of the garnishment law.
- Seek an Installment Agreement: If you’re the debtor, you can often stop a garnishment by contacting the creditor's attorney and offering a voluntary payment plan. They usually prefer a steady stream of cash over the paperwork of a court-ordered garnishment.
- Check for Prioritized Orders: Child support always wins. If a garnishee receives an order for credit card debt and an order for child support at the same time, the child support is paid first. There are strict hierarchies for who gets the money when multiple creditors are circling the same paycheck.
The role of the garnishee is a thankless one. It’s a position of legal responsibility without any of the benefits of the original contract. Understanding exactly how this mechanism works is the only way to protect your business or your personal finances from becoming collateral damage in someone else's debt battle.
Practical Checklist for New Garnishees
- Stamp the date and time on the received writ immediately.
- Notify the person whose funds are being targeted within 24 hours.
- Review state-specific "head of household" exemptions which might protect 100% of wages in places like Florida.
- Keep a dedicated ledger for garnished funds; never co-mingle them with general business operating cash.
- Confirm the "return date"—this is when you must physically send the check to the court or creditor.