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Can a creditor get a garnishment order against an Independent Contractor? Wisconsin

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  • Can a creditor get a garnishment order against an Independent Contractor? Wisconsin

    Not sure if this is the correct forum, but here goes.

    I have heard that if you work as an Independent Contractor (specifically, as a Medical Transcriptionist Independent Contractor), since you are not technically an “employee” a creditor cannot get a court order to have your wages garnished. Is this correct?

    More specifics. I work as an IC for a large company with hundreds of employees and ICs working for them. The company sends work to me as they need the work completed. I then bill them for the work I do for them. No taxes, etc are taken out from the check I receive from the company.

    Second part of the question: If it is true that a creditor cannot have my IC check garnished by the company I work for, is there any other way for a creditor to get a court order against my wages or bank accounts?

    Does this apply to all creditors? That is, credit cards, utilities, medical bills, student loans, and IRS. Or are there different ways to get a court order against my wages depending on the type of funds owed?

    I was unemployed due to medical reasons for over a year and thus got very far behind in several bills. I just recently obtained an IC job, but it will be some time before I can cover ALL the back bills. I would like to have a game plan as to which bills I should try to pay off first in order to avoid any type of garnishment, which will only make it harder to pay the other bills already past due.

    I know I can wait until I get a court notification if the credit card company, utility company, or medical bill collection agencies attempt garnishment and try to pay that bill first, but I think that student loans and the IRS can go directly to garnishment without a court order. If the IRS and student loans cannot garnish my IC check, I can probably hold them off for awhile and try to pay off the other bills first. I really would like to know in what order I should try to pay off my past due accounts.

    Thank you for your time.

  • #2
    Not true. I have worked for some pretty big companies where both payroll and accounts payable report to me. Worst case is that the wrong form gets issued, the employer calls up the issuer and the right form gets issued. Quickly. This happens fairly quickly, and since the court will just take the money directly from the employer if the employer plays games, the employer generally is (or should be) very quickly to call the court if the wrong form is used. I have had replacement IRS forms faxed less then one hour after calling them up.

    The key is that the main step is that a judgment is issued, and judgments are not specific to either employees or IC. A judgment is a court decision that someone owes someone else money.

    An order is just a court action implementing the judgment. Could be a withholding order or an asset seizure order, but once the judgment occurs, the court can do pretty much anything that they want to.

    And the employer really does not have a stake in this fight. The employer is going to do whatever the court tells them to do. I have worked for companies big enough to have large in house Legal departments. Other then kicking back orders that were technically invalid (or not really orders), I have never once worked for an employer that thought getting involved in someone else legal troubles was a good idea. And I have handled thousands of withholding orders over the years. The in house Legal departments always said make sure that the order was valid, then do exactly what the court tells you to do.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


    • #3
      It's worse. Wage garnishments are limited, they can't take all your wages. If you're an IC, you don't get wages, you have accounts receivable. The entire check can be collected if there is a judment against you.
      I am not an attorney, and don't play one on TV. Any information given is a description only and should be verified by your attorney.