REPORT TITLE:
Garnishment


DESCRIPTION:
Amends definition of "wages" under the garnishment law to include
rental income.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3195
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO GARNISHMENT. 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Hawaii's weak economy is reflected by the
 
 2 increase in the number of foreclosures on personal residences.
 
 3 Part of the problem is that in a judgment creditor situation, the
 
 4 judgment creditor is allowed to attach one hundred per cent of a
 
 5 defendant's rental income as a debt but is restricted to a
 
 6 percentage of the personal income as specified in the Hawaii
 
 7 Revised Statutes.  As a result, in many situations, persons who
 
 8 rely on rental income to pay the mortgages on personal residences
 
 9 are often unable to pay their mortgages and are forced into
 
10 foreclosure.  The problem is that rental income, in these
 
11 situations, is not properly characterized as personal income or
 
12 wages.
 
13      The purpose of this Act is to properly characterize rental
 
14 income as personal income and reduce the number of foreclosures
 
15 due to improperly handled judgment creditor claims.
 
16      SECTION 2.  Section 652-1, Hawaii Revised Statutes, is
 
17 amended by amending subsection (a) to read as follows:
 
18      "(a)  Before judgment.  When any goods or effects of a
 
19 debtor are in the possession of an attorney, agent, factor, or
 

 
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 1 trustee (in this chapter jointly and severally included in the
 
 2 term "garnishee"), or when any debt is due from any person (also
 
 3 included under the term "garnishee") to a debtor, or when any
 
 4 person has in the person's possession for safekeeping any moneys
 
 5 of the debtor, any creditor may bring the creditor's action
 
 6 against the debtor and in the creditor's petition for process, or
 
 7 by amendments of the complaint at any time before judgment, after
 
 8 meeting the requirements of section 652-1.5, may request the
 
 9 court to insert in the process a direction that service of a true
 
10 and attested copy thereof be made upon the garnishee in any of
 
11 the manners described under section 652-2.5 and to summon the
 
12 garnishee to appear personally upon the day or term appointed in
 
13 the process for hearing the action or at any other time appointed
 
14 by the court and then and there on oath to answer all of the
 
15 following inquiries, herein inclusively referred to as the
 
16 "disclosure":
 
17      (1)  Whether at the time the copy was served on the
 
18           garnishee, the garnishee had any of the goods or
 
19           effects of the defendant in the garnishee's hands and,
 
20           if so, the nature, amount and value thereof;
 
21      (2)  Whether at the time of service, the garnishee was
 
22           indebted to the defendant and, if so, the nature and
 
23           amount of the debt; or
 

 
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 1      (3)  Whether at the time of service on the garnishee, the
 
 2           garnishee had any moneys of the defendant in the
 
 3           garnishee's possession for safekeeping and, if so, the
 
 4           amount thereof.
 
 5      The summons and direction shall be signed and issued as is
 
 6 usual in other civil process after proceedings under section
 
 7 652-1.5.  The summons shall specify an amount or value of money,
 
 8 debt or goods or effects to be garnished which shall not exceed
 
 9 one hundred twenty per cent of the amount of the plaintiff's
 
10 claim, including cost and interest.  The summons shall be served
 
11 upon the garnishee in any of the manners described under section
 
12 652-2.5.  From the time of service, the garnishee shall secure in
 
13 the garnishee's hands to pay such judgment as the plaintiff shall
 
14 recover in the action, such of the following property or choses
 
15 then in the garnishee's possession or owing to the defendant as
 
16 shall equal the amount or value specified in the summons, except
 
17 what the court has expressly found to be exempt from execution
 
18 pursuant to section 652-1.5(d) or (f):
 
19      (1)  The goods and effects of the defendant then in the
 
20           hands of the garnishee;
 
21      (2)  Any debt then owing from the garnishee to the
 
22           defendant;
 
23      (3)  Moneys of the defendant then in the possession of the
 

 
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 1           garnishee for safekeeping; and
 
 2      (4)  A portion of the defendant's wages, salary, stipend,
 
 3           commissions, annuity, [or] net income under a trust, or
 
 4           rental income (in this chapter included under the term
 
 5           "wages"), remaining after the deduction of any amounts
 
 6           required by law to be withheld by withholding the
 
 7           amount to be determined as follows:  five per cent of
 
 8           the first $100 per month, ten per cent of the next $100
 
 9           per month, and twenty per cent of all sums in excess of
 
10           $200 per month, or an equivalent portion of the above
 
11           amount per week, whether then or thereafter to become
 
12           owing.  For the purposes of this chapter, rental income
 
13           shall not be characterized as a debt.
 
14 The property or choses described in (1), (2), (3), and (4) of
 
15 this paragraph are included under the term "garnishee fund" (in
 
16 this chapter).  The cumulative total value of the fund, in
 
17 advance of final judgment, shall be no more than the amount
 
18 specified in the summons.
 
19      Except as provided in section 652-1.5, the summons and
 
20 direction shall be sufficient notice to the defendant to enable
 
21 the plaintiff to bring the plaintiff's action to trial, unless
 
22 the defendant is an inhabitant of the State or has some time
 
23 resided therein, in which case a like copy shall be served
 

 
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 1 personally upon the defendant or left at the defendant's last and
 
 2 usual place of abode.
 
 3      The court shall order the garnishee fund released at the
 
 4 hearing provided in section 652-1.5 or thereafter upon the filing
 
 5 by the debtor with the court of a bond or bonds issued by a
 
 6 surety or sureties licensed to do business as such in the State,
 
 7 in an amount sufficient to pay the claim of the creditor together
 
 8 with costs and interest, and conditioned upon judgment rendered
 
 9 in favor of the creditor and to the extent the claim or any
 
10 portion thereof, together with costs and interests, if any, is
 
11 awarded.
 
12      SECTION 3.  Statutory material to be repealed is bracketed.
 
13 New statutory material is underscored.
 
14      SECTION 4.  This Act shall take effect upon its approval.
 
15 
 
16                       INTRODUCED BY:  ___________________________