Companies regularly receive garnishments for their employees. Do you have a process in place to ensure they are properly handled and that the company responds by the deadline?
Companies with employees in Nebraska should be aware of a Nebraska statute that can be used to hold the company liable if it fails to respond to the “Interrogatories” related to the garnishment. Pursuant to Neb. Rev. Stat. § 25-1028, if a garnishee (often the employer of the debtor) fails to respond to interrogatories asking about the assets of the debtor, the garnishee employer itself could be liable for the debt. The plaintiff’s attorney would be forced to file a motion, and the court would need to rule on it. However, the interrogatories from creditors and plaintiff’s attorneys often have a tight deadline and require a response within 10 days. If your payroll person is out of town, who will handle the response?
A garnishee employer is required to answer, under oath, all interrogatories from the creditor (Neb. Rev. Stat. § 25-1026). The interrogatories in a garnishment scenario request information about all assets of the debtor in the employer/garnishee’s possession or under his control at the time of the service of the summons and interrogatories. The employer must disclose truly the amount it owes to the debtor defendant, whether due or not. For an employer/garnishee that is a corporation, it must also include any stock therein held by or for the benefit of the defendant, at the time of the service of the summons and interrogatories.
Angela Madathil is a Business, M&A, and Deal Attorney and provides legal assistance to employers and businesses in Nebraska, Missouri, and Kansas. This can involve contract review and negotiation, due diligence assistance, and post-sale integration. The Goosmann Law Firm team advises to buyers and sellers of businesses, as well as business brokers throughout the Midwest and has attorneys licensed in Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota, and other states.