Wage garnishment is a legal procedure which happens when a creditor withholds a percentage of your wages or other income to pay a debt that you have failed to pay on your own. Most often, a creditor does so by petitioning a court to issue an order (or “writ of garnishment”) to an employer (or “garnishee”) that instructs the employer to pay or deliver a certain amount of an employee’s wages or other income to the creditor. The rules and procedures applicable to such proceedings can be complex. Such rules are generally described in Missouri statute (i.e., Chapter 525) and Missouri Supreme Court Rules, but garnishment situations can also implicate federal laws. See § 525.120 RSMo.; Mo. S. Ct. R. 90, et seq. The attorneys with our Firm know the rights and obligations that arise in these proceedings and can help advise you regarding them.
Wage Garnishment Proceedings
In Missouri, when a creditor obtains a judgment against a debtor, it must take additional action to collect the judgment. Garnishment is one means to do so. To obtain a garnishment order (or writ of garnishment), the judgment creditor (i.e., garnishor) must file with the court that entered the judgment a written request that complies with various requirements. See Mo. S. Ct. R. 90.02; see also Mo. S. Ct. R. 90.04 (noting “[w]rits of garnishment that would otherwise have equal priority shall have priority according to the date of service on the garnishee”). The court then issues the order, which the garnishor must serve on the garnishee. Mo. S. Ct. R. 90.02; Mo. S. Ct. R. 90.03. The garnishee then has five (5) days to deliver a copy of the summons and garnishment writ to the judgment debtor. Id.
Each writ of garnishment must contain certain statements and items of information, including notice that certain funds may be exempt from garnishment under state or federal law. See Mo. S. Ct. R. 90.035(a). To assert an exemption, the judgment debtor must file a verified claim of the exemption within twenty (20) days of receipt of the garnishment notice. See Mo. S. Ct. R. 90.035(b). The garnishor then has twenty (20) days from the date of such filing to object to the asserted exemptions by requesting court review. Id. Failing to timely request court review will result in loss of garnishment over the funds asserted to be exempt. Id. However, if an objection is timely filed by the garnishor, the court will rule upon it based on the pleadings or after holding an expedited hearing within thirty (30) days of the request for court review. Mo. S. Ct. R. 90.035(c).
Special rules exist that apply to how garnishors and garnishees exchange information regarding the wages or property subject to garnishment. See Mo. S. Ct. R. 90.07, 90.08. If a garnishor seeks such information, it must include written questions (or “interrogatories”) with the garnishment. Mo. S. Ct. R. 90.07(a). Further, the garnishor must attempt to notify other persons of the pendency of the garnishment proceeding who are disclosed as part of discovery as having an interest in all or part of the property subject to garnishment, as well as a right for that person to intervene. Mo. S. Ct. R. 90.09
Fees (including attorneys’ fees) may be available to a garnishee in connection with answering interrogatories. Mo. S. Ct. R. 90.12(a). Further, in the event a garnishor files exceptions to the garnishee’s interrogatory answers but does not obtain a judgment against the garnishee, all of the costs attending such garnishment (i.e., “an amount sufficient to reimburse the garnishee for time and expenses, including attorney fees reasonably incurred”) shall be taxed against the garnishor. Mo. S. Ct. R. 90.12(b). The garnishee’s right to costs and attorneys’ fees is not forfeited by raising good-faith assertions of an exemption belonging to the judgment debtor. Id.
If, however, a garnishee admits in its interrogatory answers that property subject to garnishment is within its possession, it must timely pay or deliver the wages or property into court or to the attorney for the garnishor, without further order of the court, in order to discharge itself from further liability for the wages or property. See Mo. S. Ct. R. 90.10; § 525.070 RSMo. If there is no other objection, dispute, or motion to quash the garnishment, the wages or property delivered to the court shall be disbursed to the garnishor, less costs, within ten days. See Mo. S. Ct. R. 90.11.
Garnishment Statute of Limitations in Missouri
Depending on the debt, Missouri statue of limitation on debt is between 5-10 years. After that time, collectors no longer have the right to file a lawsuit against you.
However, you still owe the debt even after the stature of limitations is up. If you receive a court summons on a debt that you know or believe to be time-barred, you should seek legal help to determine a course of action.
Prior to January 15, 2015, Missouri law only allowed wage garnishments for a set period of time, generally ranging from 30 to 180 days. This meant creditors had to monitor garnishments and renew them close to the end of the effective time period, so as to not lose priority to other creditors. However, Missouri law was amended in 2015 to allow for “continuous garnishment.”
Under Missouri law, “continuous garnishment” is defined as “the garnishment of earnings, as defined in Section 525.030 RSMo, that does not have a return date and instead remains in effect until the judgment is paid in full or until the employment relationship is terminated, whichever occurs first.” Mo. S. Ct. R. 90.01. Section 525.030 defines “earnings” as “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.” § 525.030.2(5) RSMo.
However, Missouri Supreme Court Rule 90.19 now requires a judgment creditor with a continuous garnishment to file a “statement of judgment” every six (6) months that indicates “all payments received by the garnishor within the preceding six months and the remaining unsatisfied portions of the judgment, which may include all unsatisfied post-judgment interest and costs.” Mo. S. Ct. R. 90.19(b). The “statement of judgment” must be filed within twenty (20) days of the expiration of the six-month period following issuance of the garnishment. Id. Failing to file such statements may result in termination of the garnishment, either by the court or another third party. Mo. S. Ct. R. 90.19(c).
Further, when an employer receives a continuous wage garnishment for an employee whose wages are subject to more than one writ of garnishment, the employer must identify all senior garnishments that already exist and inform the inferior creditor of them (including their case number(s)). See Mo. S. Ct. R. 90.04.
Limits on Wage Garnishment Amounts
Missouri law sets limits on the amount of wages that may be garnished in a workweek. See § 525.030.2 RSMo. In particular, Missouri law provides: “the maximum part of the aggregate earnings of any individual for any workweek, after the deduction from those earnings of any amounts required by law to be withheld, which is subjected to garnishment may not exceed:
- twenty-five percent, or
- the amount by which his aggregate earnings for that week, after the deduction from those earnings of any amounts required to be withheld by law, exceed thirty times the federal minimum wage prescribed by [the FLSA], or
- if the employee is the head of a family and a resident of this state, ten percent, whichever is less.”
§ 525.030.2(1); see also 15 U.S.C. § 1673 (federal law providing similar limitations). In Missouri, for pay periods longer than one week, the same principles apply with one exception. See § 525.030.2(3). For these types of pay periods, under Section 525.030.2(1)(b), “the ‘multiple’ of the federal minimum hourly wage equivalent to that applicable to the earnings subject to garnishment for one week shall be represented by the following formula: The number of workweeks or fractions thereof (x) x 30 x the applicable federal minimum wage.” Id. “For the purpose of this formula, a calendar month shall be considered to consist of 4 1/3 workweeks, a semimonthly period to consist of 2 1/6 weeks. The ‘multiple’ for any other pay period longer than one week shall be computed in a manner consistent herewith.” Id.
Exemptions from Garnishments
Missouri law defines “property subject to garnishment” as: “all goods, personal property, money, credits, bonds, bills, notes, checks, choses in action, or other effects of debtor and all debts owed to debtor.” Mo. S. Ct. R. 90.01(d). However, it does not include: “funds of the debtor on deposit with a bank or financial institution in an account in which all funds are: (1) deposited electronically on a recurring basis, and (2) reasonably identified as funds exempt from garnishment pursuant to section 513.430.1(10)(a), (b), or (c) RSMo or subject to the exemptions under Title 31 C.F.R. Part 212.” Id.
Further, Missouri exempts certain types of individuals and entities from being subject to liability as a garnishee. See, e.g., § 525.030.1 RSMo.
One of the most common types of wage garnishments is for child support. Child support orders include automatic income withholding orders; however, if a parent owing child support falls behind in payments under such an order, a garnishment proceeding may be commenced. Child support garnishments normally take priority over other garnishments that are allowed, unless the IRS already has a wage levy entered against the employer.
Missouri rules on the maximum earnings subject to wage garnishments, however, do not govern withholdings from income pursuant to a child support order. Missouri law states, in relevant part: “the restrictions on the maximum earnings subjected to garnishment do not apply in the case of any order of any court for the support of any person.” See § 525.030.2(2).
A federal law—the Consumer Credit Protection Act—establishes the limits regarding wage garnishments pursuant to child support orders. See 15 U.S.C. § 1673. When it comes to child support wage garnishments, they can be as high as 50% or 60% of an employee’s “disposable earnings” for the week, depending on whether the employee is supporting a spouse or dependent child. See 15 U.S.C. § 1673(b)(2).
Prohibition on Termination of Employees with Garnished Wages
Both federal and Missouri law prohibit the discharge of an employee “by reason of the fact that his earnings have been subjected to garnishment…for any one indebtedness.” 15 U.S.C. § 1674(a); § 525.030.5 RSMo. A willful violation of this rule constitutes a misdemeanor under Missouri law, and may result in a fine up to $1000 (or imprisonment for up to 1 year) under federal law. 15 U.S.C. § 1674(b); § 525.030.6 RSMo.