Vermont wage garnishment: 75% is exempt, and 85% if the debt came from consumer credit

Vermont does not garnish wages. It runs trustee process against them, and Rule 4.2(j) makes that a slower and more debtor-protective procedure than garnishment is almost anywhere else. There is no clerk-issued writ. There is a motion, a hearing, and a court order.

The exemption is the headline.

The exemption: 75%, or 85% for consumer credit

The earnings of the judgment debtor shall be exempt as follows: (i) Seventy-five (75) percent of the debtor's weekly disposable earnings, or 30 times the federal minimum hourly wage, whichever is greater; or (ii) If the judgment debt arose from a consumer credit transaction, as that term is defined by 15 U.S.C. § 1602 and implementing regulations of the Federal Reserve Board, eighty-five (85) percent of the debtor's weekly disposable earnings, or 40 times the federal minimum hourly wage, whichever is greater; or (iii) If the court finds that the weekly expenses reasonably incurred by the debtor for his or her maintenance and that of dependents exceed the amounts exempted by the preceding subparagraphs, such greater amount of earnings as the court shall order.

The federal floor most states apply leaves 75% exempt, so subparagraph (i) is unremarkable. Subparagraph (ii) is not: where the debt came from a consumer credit transaction, only fifteen cents of each disposable dollar is reachable, and the alternative floor rises from thirty to forty times the minimum wage. Debt-buyer and credit-card judgments fall squarely inside it.

Subparagraph (iii) then lets the court go further on a showing of household expense. The comparison for other states is in claiming an exemption from garnishment.

Four conditions before it can issue at all

Rule 4.2(j)(1) is a gate:

No trustee process shall issue against any person for any amount due from such person to the defendant as earnings except where: (i) The claim has first been reduced to judgment; (ii) Execution may issue on the judgment pursuant to these rules; (iii) The judgment debtor has neglected or refused to pay or make reasonable arrangements to pay the judgment; and (iv) The judgment debtor has not, within the two-month period prior to the hearing provided in paragraph (4) of this subdivision, been a recipient of assistance from the Vermont Department of Prevention, Assistance, Transition, and Health Access.

All four, not any of them. Condition (iii) matters most in practice: a debtor who has offered reasonable arrangements to pay is not someone against whom wage trustee process may issue. Making a documented offer is therefore a defense to the motion, not merely a courtesy.

Condition (iv) is an outright bar tied to public assistance received in the two months before the hearing.

The motion, the hearing, and two service deadlines

Rule 4.2(j)(3) sets the machinery out in one paragraph:

The judgment creditor's attorney shall file a motion for trustee process describing in detail the grounds for the motion, the amount alleged to be unpaid, and the source of earnings of the judgment debtor. Upon receipt of the motion, the clerk shall notify the parties of the date and time of hearing on the motion. The judgment creditor's attorney shall prepare a summons on a form provided by the court, a disclosure form, and a list of exemptions and shall serve them and the motion on the trustee and any judgment debtor against whom judgment was issued by default in the manner provided by Rule 4 . Service shall be completed at least fourteen (14) days prior to the date set for hearing by the clerk. The trustee shall appear at the hearing or shall serve a disclosure under oath at least 5 days before the hearing.

The creditor's attorney prepares the summons, the disclosure form and a list of exemptions — the debtor is told what is protected as part of being served.

One more obligation, easy to overlook: "If the judgment is satisfied prior to the date set for hearing, the judgment creditor shall notify the clerk," and the Presiding Judge then cancels the summons.

What the order must contain

Rule 4.2(j)(4) requires the court to consider the testimony of any party or the trustee and any affidavit of the judgment creditor, to make the findings specified by section 3169 of Title 12 if possible, and then to grant or deny. A granted order must state five things:

(i) the address of the judgment creditor to which amounts withheld are to be delivered; (ii) the amount of earnings of the judgment debtor that shall be exempt; (iii) the period in which withholding of wages is authorized to occur; (iv) a statement that section 3172 of Title 12 prohibits discharge of the employee subject to the order because of the exercise of trustee process against the employee; and (v) a statement that failure to withhold and deliver nonexempt earnings as directed in the order may make the trustee liable to the judgment creditor for the amounts the trustee fails to withhold and deliver together with any costs, interest and reasonable attorneys' fees incurred in their collection.

Item (iii) is worth noticing from both sides: Vermont's order has a stated duration, not an indefinite continuing levy. Item (iv) puts the anti-discharge protection on the face of the document the employer receives, and item (v) tells the employer what happens if it ignores the order.

What counts as earnings

Rule 4.2(j)(5) defines the term more broadly than "wages," and includes one item no other state's rule does:

The term "earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program and proceeds from the sale of milk with respect to an individual engaged in the occupation of dairy farming, but does not include payments from sources which by law are exempt from attachment.

Commissions and bonuses are inside it. So are periodic pension and retirement payments — which in many states are outside wage garnishment entirely. So, expressly, are milk proceeds for a dairy farmer.

"Disposable earnings" is then defined as "that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld" — taxes and other legally required deductions, not voluntary ones.

The rest of the enforcement toolkit

Rule 69 governs enforcement generally, and packs several distinct rules into one paragraph:

Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. No execution running against the body shall be issued to enforce a judgment in any civil action for money damages.

Then the practical details:

Executions shall be made returnable within sixty days from the date thereof. Executions may be issued so long as the judgment remains unsatisfied and the time limit of 12 V.S.A. § 2681(a) on issuance of an execution on the judgment has not run. The judgment creditor shall deliver to the officer levying execution a list of exemptions, which the officer shall serve on the judgment debtor, together with a copy of the writ of execution.

Sixty days to return the execution, and the list of exemptions again travels with the writ — Vermont requires the debtor to be told what is protected at every stage.

Interest is calculated at the front end and collected daily:

In the writ of execution, the clerk shall set forth the amount of post-judgment interest due per day, calculated on the full amount of principal included in the judgment at the maximum rate allowed by law. In levying execution, the officer shall collect per diem interest in the daily amount from the date of entry of judgment to and including the date of satisfaction.

And a partial recovery is applied interest-first, with the clock reset:

If an execution is returned partially satisfied, the return shall show the date of partial satisfaction. The amount collected shall be first applied to interest accrued to that date. Interest on the portion of the judgment remaining unsatisfied shall be computed from the date of partial satisfaction and collected in the same manner on any subsequent levy of execution.

Rule 69 also opens post-judgment discovery: a judgment creditor "may obtain discovery from any person, including the judgment debtor, in the manner provided in these rules." If those answers do not come, the Vermont motion to compel applies to post-judgment discovery as it does to any other.

A short checklist

If you hold the judgment:

1. Check all four conditions in Rule 4.2(j)(1) before moving — especially whether the debtor has offered reasonable arrangements to pay.
2. Work out which exemption applies. A consumer credit judgment reaches only 15% of disposable earnings.
3. Describe the grounds, the unpaid amount and the source of earnings in the motion; the rule requires all three.
4. Serve 14 days before the hearing, with the summons, the disclosure form and the list of exemptions.
5. Draft the order with all five required statements, including the anti-discharge and trustee-liability language.
6. Tell the clerk if the judgment is satisfied before the hearing date.

If the judgment is against you:

1. Show any payment offer you made. Condition (iii) is not satisfied if you made reasonable arrangements.
2. Check whether the debt was consumer credit — the exemption jumps from 75% to 85%.
3. Bring your household expenses to the hearing. Subparagraph (iii) lets the court exempt more.
4. Check the two-month public assistance bar in condition (iv), which blocks the process outright.

Where these rules live

• V.R.C.P. 4.1 — Attachment
• V.R.C.P. 4.2 — Trustee process
• V.R.C.P. 69 — Execution
• Claiming an exemption from garnishment
• Vermont motion to compel discovery
• Setting aside a Vermont default judgment

This page explains what the rules say. It isn't legal advice, and the Title 12 provisions these rules operate on — including sections 3169 and 3172 — are statutes this site doesn't carry.