§ 105B-3. Procedure.
§105B‑3. Procedure.
(a) Notwithstanding anyother provision of the law, in any case in which the Authority obtains ajudgment against a debtor as defined in this Chapter, a judge of the districtcourt in the county where the debtor resides or is found may enter an order ofwithholding whereby no more than ten percent (10%) of the debtor's monthlydisposable earnings shall be withheld for the repayment of the debt owed to theAuthority. For purposes of this section, "disposable earnings" is definedas that part of the compensation paid or payable to the debtor for personalservices; whether denominated as wages, salary, commission, bonus, or otherwise(including periodic payments pursuant to a pension or retirement program) whichremains after the deduction of any amounts required by law to be withheld.
(b) The Authority maymove the court for an order of withholding. The motion shall be verified andshall state the name and address of the employer of the debtor, the debtor'smonthly disposable earnings from said employer (which may be based uponinformation and belief), and the amount sought to be withheld, not to exceedten percent (10%) of the debtor's monthly disposable earnings. The motionshall be accompanied by a letter to the debtor which includes information thatthe Authority will withdraw the motion if the debtor executes a sworn statementto the Authority that his family income is at or below two hundred percent(200%) of the annual federal poverty guidelines. The letter shall include thedefinitions of family and family income, the federal poverty guidelines ineffect as of the date of the letter, and the procedure to contest the proposedgarnishment. The Authority shall provide a form to the debtor for the purposeof securing his sworn statement about the level of his annual family income. The motion shall be served on both the debtor and his alleged employer eitherpersonally or by certified mail, return receipt requested as set forth in G.S.1A‑1, Rules of Civil Procedure.
(c) At any time followingthe filing with the district court of a motion under this section, the debtormay inspect and copy records relating to the debt or debts at the offices ofthe Authority.
(d) In lieu of or inconclusion of any legal proceeding instituted under this section, the debtormay enter into a written agreement with the State Education AssistanceAuthority to establish a schedule for the repayment of the debt or debts byperiodic payments made directly to the Authority. Upon acceptance of any suchrepayment agreement, the Authority shall withdraw the motion for withholding.
(e) ContestedWithholding. The debtor or the payor may contest the withholding only on thebasis of mistake of fact. To contest the withholding, the debtor or the payormust, within 30 days from the date of service, request a hearing before thedistrict court by serving a written request upon the court and the Authoritywhich specifies the mistake of fact upon which the hearing request is based. If the asserted mistake of fact can be resolved by agreement between theAuthority and the debtor or the payor, whoever has asserted the mistake offact, no hearing shall occur. Otherwise, a hearing shall be held and adetermination made within 30 days of the filing of the request by the debtor orpayor. Following the hearing the court may enter an order of withholding notto exceed ten percent (10%) of the debtor's monthly disposable earnings and notto reduce the debtor's annual family income to a point at or below two hundredpercent (200%) of the annual federal poverty guidelines. However, the courtshall not enter an order of garnishment unless the court makes findings of factthat the family income of the debtor at the time of the hearing exceeds twohundred percent (200%) of the annual federal poverty guidelines. If an orderof withholding is entered, a copy of same shall be served on the debtor and thepayor either personally or by certified mail, return receipt requested. Theorder shall set forth sufficient findings of fact to support the action by thecourt and the amount to be withheld for each pay period. The order shall besubject to review for modification and dissolution upon the filing of a motionin the cause.
(f) UncontestedWithholding. If neither the debtor nor the payor contests the withholding asprovided in subsection (e) within the 30‑day response period, the courtmay, without further hearing, enter an order of withholding not to exceed tenpercent (10%) of the debtor's monthly disposable earnings and not to reduce thedebtor's annual family income to a point at or below two hundred percent (200%)of the annual federal poverty guidelines. However, the court shall not enteran order of garnishment unless the court makes findings of fact that the familyincome of the debtor at the time of the hearing exceeds two hundred percent(200%) of the annual federal poverty guidelines. If an order of withholding isentered, a copy of same shall be served on the debtor and the payor eitherpersonally or by certified mail, return receipt requested. The order shall setforth sufficient findings of fact to support the action by the court and theamount to be withheld for each pay period. The order shall be subject toreview for modification and dissolution upon the filing of a motion in thecause.
(g) Upon receipt of anorder of withholding, the payor shall transmit without delay the amount orderedto be withheld to the clerk of superior court who shall disburse it to theState Education Assistance Authority. The amount ordered to be withheld shallbe increased by a processing fee of two dollars ($2.00) to be retained by thepayor, unless waived, for each withholding under the order. (1989,c. 475, s. 1.)