Creditor Debt Deductions

Creditor debt deduction is an involuntary deduction ordered against the subject of a successful lawsuit.

If a creditor, lender, debt collector, attorney, or other party wins the lawsuit, a judgment is made to withhold earnings to pay the third party.

Payroll Processing

Some states have rules that restrict the processing of a person's Creditor Debt deduction to one deduction per state per payroll period.

After the Creditor Debt deduction is satisfied, on the next pay cycle, the payroll process starts the next Creditor Debt deduction based on the element's subprocessing order.

The deduction is considered satisfied when:

Deduction is end dated
Time limit is met
Total owed is met

Calculate Order Amount or Rate

To process creditor debts:

To calculate by	Do this
Order amount	Add the <state name> Creditor Debt Order Amount calculation value on the appropriate component of the person's Involuntary Deductions card.
Order rate	Add the <state name> Creditor Debt Order Rate calculation value on the appropriate component of the person's Involuntary Deductions card.
State maximum	This is the default behavior. If you don't add an order amount or order rate calculation value, the payroll process applies the maximum allowed order rate as defined by state rules.

To calculate by

Do this

Order amount

Add the <state name> Creditor Debt Order Amount calculation value on the appropriate component of the person's Involuntary Deductions card.

Order rate

Add the <state name> Creditor Debt Order Rate calculation value on the appropriate component of the person's Involuntary Deductions card.

State maximum

This is the default behavior.

If you don't add an order amount or order rate calculation value, the payroll process applies the maximum allowed order rate as defined by state rules.

General Considerations

When defining creditor debt deductions elements, use the Creditor Debt secondary classification. There are also some special considerations related to these elements.

In this case	What you need to do
Consumer credit orders for Iowa and Washington	Use the Creditor Debt secondary element classification for Iowa and Washington consumer credit orders. For nonconsumer orders, use the Garnishment classification. For further info, see Garnishment Deductions for the US in the Help Center.
Creditor debt processing fees for Indiana	Indiana's processing fee can be the greater of: $12 3% of the total owed as set by the order The payroll process determines the fee amount to deduct. If 3% of the total owed is greater, the process deducts $12 per pay period until the total fee due is met. To deduct the total fee due in one payment, use the Indiana Creditor Debt Processing Fee Per Pay Period Amount override. For further info, see Available Overrides for Involuntary Deductions for the US on the Help Center.
Creditor debt processing fees for Oregon	Oregon requires you collect the total processing fees after the order is satisfied. In these cases, you must determine the amount to be deducted and configure a voluntary deduction.
Creditor debts for Kansas	Set Suspend Involuntary Deduction Processing to Yes for an order when: The order has met the total owed. The agency hasn't released the order. The employee has one or more additional active creditor debts from Kansas. This prevents the unreleased order from contributing to the state's multiple order divide equally rule.
Creditor debts for Nevada	The Nevada creditor debt exemption percentage is predefined as 75%. Nevada's writ of garnishment rules dictate if the employee's gross weekly salary is less than $770, you must override the exemption percentage to 82%.
Dependent exemptions for Virginia	Use the Calculation Value Definitions task to define creditor debts exemptions for dependents. You can set these exemptions: Virginia Creditor Debt Exemption Amount for One Dependent Virginia Creditor Debt Exemption Amount for Two Dependents Virginia Creditor Debt Exemption Amount for Three or More Dependents For further info, see Set Legislative Rule Overrides for Involuntary Deductions for the US in the Help Center.
Head-of-Household filing status	Some states require the Head-of-Household filing status designation to calculate the correct exemption amounts. Set this designation in Filing Status on the US Involuntary Deduction Data calculation component details. For further info, see Configure Involuntary Deduction Details for the US in the Help Center.
Landlord debts for Pennsylvania	Pennsylvania doesn't allow creditor debts. Don't use this secondary classification for Pennsylvania deductions. For Pennsylvania landlord debts, use the Garnishment secondary element classification. For further info, see Garnishment Deductions for the US in the Help Center.
Maximum withholding duration days for Ohio	There's no maximum withholding duration for single orders issued from Ohio. When you receive a second creditor debt for the employee from Ohio, they mandate a 182-day maximum withholding duration for the first order. Use the Calculation Cards task to add Ohio Creditor Debt Maximum Withholding Duration Days to the card and set it to `182` for the first order. Note: The Ohio Creditor Debt Maximum Withholding Duration Days for Multiple Orders calculation value is informational only. Entering a value here has no impact on processing the deduction.
Maximum withholding duration days for Oregon	Oregon garnishments and creditor debts have a maximum withholding duration of 90 days. For orders issued from Oregon county agencies, there's no maximum withholding duration, so you must set the override value to `0`.
Maximum withholding duration days for Utah	The maximum withholding duration for single orders issued from Utah is 365 days. Use the Calculation Cards task to enter an appropriate value for the Maximum Withholding Duration Days calculation value. For further info, see Overview of Involuntary Deduction Overrides for the US on the Help Center.
States that don't allow creditor debts	These states don't allow creditor debts and won't deduct anything in a payroll process. New Hampshire North Carolina Pennsylvania South Carolina Texas Note: If you define a creditor debt for one of these states and attempt to process it in a payroll, the process ignores it. You will receive a message stating this deduction isn't allowed.
Student loans for North Carolina	North Carolina doesn't allow creditor debts. Don't use this secondary classification for North Carolina deductions. For North Carolina student loans, use the Garnishment secondary classification. For further info, see Garnishment Deductions for the US in the Help Center.