GENERAL ASSEMBLY OF NORTH CAROLINA
HOUSE BILL 30
Short Title: Allow Wage Garnishment to Satisfy Judgments.
Representative T. Moore (Primary Sponsor).
For a complete list of Sponsors, see Bill Information on the NCGA Web Site.
Judiciary Subcommittee A.
February 3, 2011
A BILL TO BE ENTITLED
AN ACT to authorize the garnishment of wages as an additional means of satisfying judgments in civil actions.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 1-362 reads as rewritten:
"§ 1-362. Debtor's property ordered sold.
The court or judge may order any property, whether subject or
not to be sold under execution (except the homestead and personal property
exemptions of the judgment debtor), in the hands of the judgment debtor or of
any other person, or due to the judgment debtor, to be applied towards the
satisfaction of the
judgment; except that the judgment. The earnings
of the debtor for his the debtor's personal services, at any
time within 60 days next preceding the order, cannot be so applied when it
appears, by the debtor's affidavit or otherwise, that these earnings are
necessary for the use of a family supported wholly or partly by his labor.services
that are less than or equal to 30 times the federal minimum hourly wage per
work week or seventy-five percent (75%) of the debtor's net income, whichever
is greater, shall not be subject to attachment or garnishment."
SECTION 2. Chapter 1C of the General Statutes is amended by adding a new Article to read:
"Garnishment of Wages to Enforce Judgments.
"§ 1C-1501. Definitions.
The following definitions apply in this Article:
(1) Disposable earnings. - That part of the compensation paid or payable for personal services, including wages, salary, commission, bonus, payments to a pension or retirement program, and other similar payments that remain after the deduction of any amounts required by law to be withheld.
(2) Nonexempt earnings. - That portion of the disposable earnings owed to a judgment debtor that are not exempt under G.S. 1-362.
"§ 1C-1502. Judgments may be enforced by garnishment of wages.
(a) Final Judgments May Be Enforced by Garnishment. - Except as provided in G.S. 1C-1511, a final judgment awarding monetary damages against an individual may be enforced by a garnishment order directing the employer of the judgment debtor to pay nonexempt earnings to the judgment creditor.
(b) Public Compensation No Exception. - Earnings paid by a city, county, State, or local government authority are subject to the provisions of this Article in the same manner as earnings paid by any other employer.
"§ 1C-1503. Issuance of garnishment order; service.
(a) Clerk to Issue Order. - At any time after 30 days following the entry of a final judgment, upon the request of the judgment creditor, the clerk of superior court in the county in which the judgment was originally entered shall issue a garnishment order directing the employer of the judgment debtor to pay nonexempt earnings to the judgment creditor.
(b) Notice Required. - The garnishment order shall bear a notice that the judgment debtor has the right to file an objection to the garnishment order pursuant to G.S. 1C-1504.
(c) Service of Order. - A garnishment order issued pursuant to subsection (a) of this section shall be served by the judgment creditor on the judgment debtor and the employer of the judgment debtor, by certified mail, return receipt requested, or served by any means authorized under Rule 4 of the Rules of Civil Procedure.
"§ 1C-1504. Objection by judgment debtor; hearing on objection.
At any time following the issuance of a garnishment order under G.S. 1C-1503, the judgment debtor may file with the court and serve upon the employer and the judgment creditor a notice of objection to the garnishment order. Within 10 days after a notice of objection is filed, the clerk shall notify, by first-class mail, the judgment creditor and the judgment debtor of a hearing to be held before the clerk to determine the validity of the judgment debtor's objections. The hearing shall be held no later than 30 days following the filing of the notice of objection. Following the hearing, the clerk may make such orders as are necessary to modify or vacate the garnishment order. Appeal from the order by the clerk may be made to a judge of the court in the division from which the original judgment was issued.
"§ 1C-1505. Payment to the judgment creditor; employer may retain fee.
(a) Withholding and Remittance to Creditor. - If a garnishment order is issued pursuant to this Article, the employer of the judgment debtor shall withhold the nonexempt earnings of the judgment debtor and shall remit the amount withheld to the judgment creditor or the attorney of the judgment creditor as provided in the garnishment order within 15 days following the last wage pay period of each month, beginning with the pay period following the pay period in which the order is served upon the employer.
(b) Retention of Fee. - The employer may deduct from the amount garnished a fee not to exceed five dollars ($5.00) per pay period. The judgment creditor shall apply toward satisfaction of the judgment all amounts deducted by the employer pursuant to the garnishment order, including the fee retained by the employer.
"§ 1C-1506. Duration of garnishment order.
A garnishment order issued pursuant to G.S. 1C-1503 shall continue until whichever of the following events occurs first:
(1) The underlying judgment has been satisfied in full.
(2) The judgment debtor ceases to be employed by the employer, unless the judgment debtor is thereafter reinstated or reemployed within 90 days from the date employment was terminated.
"§ 1C-1507. Priority of garnishment orders.
Garnishment orders shall be satisfied by the employer according to the following order of priority, from highest to lowest:
(1) Garnishment pursuant to some authority other than this Article, by a governmental entity, by a public hospital, for child support, or by some other entity or for some other purpose. Nothing in this Article alters the priority in which such garnishments are to be satisfied.
(2) Garnishment pursuant to this Article. If an employer is served with more than one garnishment order obtained pursuant to this Article against the same judgment debtor, the garnishments shall be satisfied in the order in which they were served on the employer.
"§ 1C-1508. Application of payments received.
All payments received by a judgment creditor shall be credited in the following order:
(1) Against the record costs of the judgment and garnishment orders.
(2) Against the accrued interest on the unpaid balance of the judgment, including postjudgment interest.
(3) Against the principal amount of the judgment.
(4) Against any attorneys' fees and costs awarded.
"§ 1C-1509. Notice of satisfaction.
The judgment creditor shall, within five business days following the satisfaction of the judgment, deliver to the employer a written notification that the garnishment order is satisfied. The judgment creditor shall, within 30 days after satisfaction of the judgment, notify the clerk in writing that the judgment is satisfied.
"§ 1C-1510. Improper garnishment.
In the event of an improper garnishment, the clerk may set aside the garnishment order and make such further orders as are necessary to return to the judgment debtor any funds improperly garnished, together with reasonable costs and attorneys' fees.
"§ 1C-1511. Garnishment not available to enforce deficiency judgments.
The clerk shall not issue an order of garnishment pursuant to this Article to enforce any deficiency judgment described in Article 2 of Chapter 45 of the General Statutes."
SECTION 3. G.S. 95-241(a) reads as rewritten:
"(a) No person shall discriminate or take any retaliatory action against an employee because the employee in good faith does or threatens to do any of the following:
(1) File a claim or complaint, initiate any inquiry, investigation, inspection, proceeding or other action, or testify or provide information to any person with respect to any of the following:
a. Chapter 97 of the General Statutes.
b. Article 2A or Article 16 of this Chapter.
c. Article 2A of Chapter 74 of the General Statutes.
d. G.S. 95-28.1.
e. Article 16 of Chapter 127A of the General Statutes.
f. G.S. 95-28.1A.
g. Article 52 of Chapter 143 of the General Statutes.
h. Article 5F of Chapter 90 of the General Statutes.
(2) Cause any of the activities listed in subdivision (1) of this subsection to be initiated on an employee's behalf.
(3) Exercise any right on behalf of the employee or any other employee afforded by Article 2A or Article 16 of this Chapter, by Article 2A of Chapter 74 of the General Statutes, or by Article 52 of Chapter 143 of the General Statutes.
(4) Comply with the provisions of Article 27 of Chapter 7B of the General Statutes.
(5) Exercise rights under Chapter 50B. Actions brought under this subdivision shall be in accordance with the provisions of G.S. 50B-5.5.
(6) Has his or her wages garnished by legal process."
SECTION 4. This act becomes effective October 1, 2011, and applies to civil actions filed on or after that date.