Committee Member Jan Watson Weighs in on Wage Deduction Orders

I have always treated the wage deduction question this way:

The wage deduction affidavit and order are not the same things. Once the employer is served with the affidavit they must respond with information regarding wages and withholdings by the "return date". The employer must also begin immediately deducting the appropriate amount from the employees wages, but does not turn it over to the creditor until an order is entered. The creditor must motion up the case to have the order entered after they receive the employer's answer, then serve a copy (preferably certified) of the order on the employer.

When I'm representing a debtor who files after the wage garnishment is served on the employer but before the order is entered, I treat the property as part of the debtor's estate. If appropriate the debtor can exempt the withheld wages then ask the Court to avoid the judgment lien and order turnover of the withheld wages. Once the "order" is entered, however and the wages are actually turned over I haven't found a way to get them back - the trustee can avoid the turnover as a preferential transfer if they are moved.

Follow up Question: who gets the withheld wages when the debtor doesn't exempt them and doesn't move for lien avoidance? Seems like they are forever in limbo.

Ed. Note: Good Question