Wage and Bank Garnishment
Garnishment is the post-judgment collection mechanism diverting funds from a debtor's wages or bank accounts to a judgment creditor — applied against MCA personal guarantors when business assets are insufficient to satisfy judgment — subject to state-specific exemption rules and limits.
Why This Matters
Garnishment converts judgments into actual recovery. Bank garnishment (also called bank levy) freezes specified bank account funds until applied to judgment satisfaction. Wage garnishment diverts a portion of personal guarantor wages directly to judgment creditor, subject to federal and state limits (typically capped at 25% of disposable income). Garnishment effectiveness varies dramatically by state — some states (Texas, North Carolina, Pennsylvania) prohibit wage garnishment entirely for consumer debts, while others (most states) allow garnishment within statutory limits. Personal guarantors with garnishment-protected income become effectively judgment-proof from wage collection perspective.
Frequently Asked Questions
Frequently Asked Questions
Can MCA personal guarantors avoid garnishment?
Through bankruptcy filing (which automatically stays garnishment), residence in garnishment-prohibition states, structuring income through garnishment-protected sources (some retirement accounts, certain government benefits), or successful judgment-vacating motions. None of these strategies are guaranteed; legal counsel essential for navigation.
What's the practical effectiveness of MCA garnishment collection?
Bank garnishment recovers funds available at moment of levy — often less than judgment amount. Wage garnishment provides ongoing recovery but limited by statutory caps and personal income availability. Combined collection strategies (multiple garnishment instruments) typically recover more than single-instrument approaches.