Wage Garnishment in a Sole Proprietorship

by Michael Wolfe
The judgment is a court order directing the debtor to repay money owed to you.


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When a person owes money to another party, the creditor will often take drastic measures to receive payment. If the creditor files a civil suit against the debtor, the debtor may end up being ordered by a court to pay a civil judgment to the creditor. If the debtor fails to pay the money he owes, he may face an order of garnishment, which will be served on his employer -- even in a sole proprietorship.

Sole Proprietorship

When a company is formed, the organization has to choose a structure under which to pay taxes. One of these is a sole proprietorship, in which the business has one owner and is one by one party, making him legally identical to the business. When a business is a sole proprietorship, the garnishment order will be served in much the same way that a normal garnishment order would be served.

Wage Garnishment

When a person has a wage garnishment order issued against him, the judge will order the garnishment served on the employer. Although a sole proprietorship is owned by one party, this does not mean that he cannot have employees. If a judge orders the proprietor to withdraw money from the employee's paycheck, the proprietor is legally obligated to comply.


If a person is self-employed, either in a self-proprietorship or as a contract employee, garnishment may work differently. A person who owns a self-proprietorship can still have his money garnished, although he will not be required to garnish money from himself. Instead, if he has a contract with another company in which he receives a regular income stream, the company that pays him may receive a garnishment order.

Government Garnishments

A sole proprietorship can also be the object of garnishment if it owes money to the government -- either the state or the federal government. In such an instance, the government will often not be required to file a civil suit before commencing garnishment. This money can be taken out of a number of sources, including a company's income tax refund and, in some cases, from federal or state benefits.

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