Payroll News

Growing Number of States Suspend Garnishments During Virus Crisis

May 6, 2020, 5:47 PM

A growing number of states have temporarily suspended most garnishments during the coronavirus crisis.

Among those put on hold were new and existing garnishments, excluding those for child support and spousal support. Some states also moved to protect federal virus-relief payments from garnishments.

Following is a list of states with temporary garnishment rules:

California exempted any federal, state, and local financial assistance provided in response to Covid-19 from levies and garnishments under Executive Order N-27-50, enacted April 23.

• In the District of Columbia, creditors and debt collectors may not initiate, threaten, or act on a garnishment until at least 60 days after the Covid-19 emergency ends under D.C. Act 23-286, enacted April 13.

Illinois temporarily suspended wage garnishment orders under state Executive Order 2020-25. The order, which took effect April 14, suspended wage-deduction summonses, which are sent to employers and require the garnishment of employee wages to satisfy a creditor’s claim.

• A Massachusetts emergency regulation (940 C.M.R. 35.00), issued March 27 by the state attorney general, prohibits unfair, deceptive, or threatening practices by creditors or debt collectors related to garnishments. The rule remain in effect 90 days or until the state of emergency expires.

Minnesota temporarily suspended wage garnishments for consumer debt, such as loans and credit cards, under Executive Order 20-50, enacted May 4. Federal, state, local, and tribal relief payments for the virus are exempt from creditor claims, including garnishments.

Nevada court-ordered wage garnishments were temporarily suspended under Directive 017 , enacted May 1. The directive is to remain in effect until the end of the virus emergency that was declared March 12 by the state. New garnishment orders are not to be issued or served, and funds or property garnished after May 1 are to be returned, the directive said.

Oregon prohibited garnishments of federal CARES Act relief payments under Executive Order 20-18, enacted April 17. The order extended protections to the Coronavirus Aid, Relief, and Economic Security (CARES) Act payments that cover federal benefit payments, such as Social Security, disability, and veterans’ benefits, the state said.

• The Texas Supreme Court issued an order April 9 that allows garnishments to be issued but suspends service of the garnishment until after May 7.

• The Virginia Supreme Court, in guidance issued April 23, clarified that new garnishments are not to be issued during the virus emergency. Emergency hearings may be held remotely after a garnishment exemption is requested. The virus emergency was first declared March 16 and has been extended to May 17.

Washington temporarily suspended wage garnishments for consumer debt, such as credit cards or loans, under Proclamation 20-49, which enacted April 14. The measure, which aims to protect federal relief payments from debt collectors, is in effect until May 14. The measure also temporarily waived the accrual of interest on debt judgments.

Federal relief payments. Attorneys general from at least 25 states sent a letter to in a letter to Treasury Secretary Steven Mnuchin requesting that relief payments made during the coronavirus crisis be exempt from garnishments. The letter, sent April 13, was signed by the attorneys general of California, Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and Hawaii’s Office of Consumer Protections.

To contact the reporter on this story: Christine Pulfrey in Washington at cpulfrey@bloombergtax.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bloombergtax.com

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