In Colorado, Creditors can garnish wages and bank accounts once they obtain a judgment against you. There are two main types of garnishments that consumers will see in debt collection cases: Writs of Continuing Garnishments and Writs of Garnishment with Notice of Exemption and Pending Levy. These Writs are issued by a court for the benefit of your creditors and will allow them to garnish certain funds in an effort to pay off your judgments.
Writs of Continuing Garnishment are usually served on your employer who is directed to withhold a certain percentage of your wages and send that money to the judgment creditor. Usually, a creditor can garnish 25% of your net wages and, once served, the Writ of Continuing Garnishment is good for 182 days. If an employer fails to withhold the wages as directed by the Writ, the employer can be liable for the amount they failed to withhold.
Writs of Garnishment with Notice of Exemption and Pending Levy are generally used to garnish funds from bank accounts. The Writ is served on your bank who must tell the judgment creditor how much money is in your account and freeze that money until the bank receives further orders from the court. The amount that can be garnished from a bank account depends on what type of funds were in the account. For instance, a creditor can take 25% of the bank balance if it consists of wages from your employer. Some sources of money (e.g., Social Security, Child Support) are fully exempt and cannot be taken by creditor. However, once your bank receives a Writ of Garnishment, it will be your responsibility to claim the bank balance as exempt and prove that the funds come from an exempt source. Co-mingling funds can jeopardize exemptions so if you're faced with a lawsuit, you should use caution when co-mingling funds in your bank accounts.
Dealing with Writs of Garnishment can be extremely difficult. If your bank account has been frozen by a creditor, you are likely short on money and options. It is important to speak with an experienced consumer attorney who can help determine whether the garnishment is valid and, if so, what exemptions or defenses you may have. By addressing the situation before a Writ of Garnishment is issued, you can likely save yourself money and time by avoiding garnishment all together.