Garnishment is when a third party, called a garnishee, having possession or control of money belonging or owed to a debtor, is ordered to pay some of that money to one of the debtor’s creditors, to satisfy a legally recognized debt. Any third party with or owing money to a debtor can be a garnishee: debtor’s bank, debtor’s pension plan, or debtor’s employer are all common garnishees. When the garnishee is debtor’s employer, the process is called wage garnishment and the money owed to the debtor is his or her salary or wages.
Creditors cannot garnish wages on their own. They need a court order to do this. Garnishment will, with very few exceptions (such as for the IRS, when collecting taxes) only be issued to enforce a court judgment. A judgment is a court determination resulting from a lawsuit. A monetary (or money) judgment is a court determination that one party owes money to another. Anyone who has a monetary judgment in his, her, or its favor, from any type of lawsuit, is a creditor who can seek garnishment. The most common garnishments are for taxes, credit card bills, medical bills, alimony, and child support, but always remember that garnishment is available for any legally recognized debt.
Missouri Garnishment Exemptions and Non-Exemptions
There are several limitations on garnishment. One is that a number of sources of income are exempt from garnishment under state or federal law.
- Social Security: under federal law, Social Security can only be garnished for child support, alimony, federal taxes, and a few other debts owed the federal government. Missouri then goes one better than federal law, and completely exempts Social Security from garnishment.
- Pensions and retirement benefits: Most states protect state employee pensions; Missouri protects state employees, plus municipal employees, teachers, police, and fire fighters. In addition, Missouri protects all retirement benefits, at least up to the level or amount actually needed for the recipient’s support.
- Several kinds of public benefits or assistance are protected, such as: workers’ compensation; unemployment benefits; aid to families with dependent children; and veteran’s benefits.
- Insurance and annuities: this is the one area where Missouri is less protective than many other states. It protects fraternal society benefits (with some caveats and limitations) and disability or illness benefits, but does not appear to generally protect life insurance proceeds, which are commonly protected elsewhere.
- Alimony, support, or maintenance: up to $750 per month
Missouri Maximum Threshold
Missouri sets its own law on how much non-exempt income may be garnished. However, for the most part, it tracks or follows federal law, in that the lesser of the following may be garnished (though there is one critical exception which is good for many debtors, discussed below):
- 25% of disposable income, defined as income remaining after legally required deductions—and only legally required deductions, like FICA—are taken from a person’s
- The amount by which a debtor’s weekly income exceeds 30 times the minimum wage
That’s not 25% of income for each garnishment—it’s total of 25% of disposable income that may be subject to garnishment, no matter how many judgments, creditors, debts, or threatened garnishments there are.
Two kinds of debts, taxes and child support, will allow more of the debtor’s income than 25% to be garnished. For example, up to 50 % - 60% of a debtor’s income could be garnished for child support.
What is that critical Missouri departure from the federal scheme for how much can be garnished? If someone is the head of—and supports—a household, only 10% of their non-exempt disposable income can be garnished. That means that for the primary or sole breadwinner of a family, 90% of his or her income is protected from garnishment.
Missouri Statute of Limitations
There are two types of statutes of limitation, or time period to take legal action, which are meaningful for garnishment. The first one is the statute of limitations for the debt or cause of action on which the garnishment is based. That can vary widely by the cause of action, but for some of the most common consumer debts, the limitation periods in Missouri are:
- Open accounts (credit cards), oral (or verbal) contracts: 5 years
- Written contracts or promissory notes: 10 years
Remember: the creditor must have sued, won, and obtained a judgment before seeking garnishment.
The second statute is for enforcing the judgment. In Missouri, a creditor has at least 10 years (possibly more; renewing or extending the time period is possible) to seek garnishment or otherwise enforce the action.
Writ of Garnishment in Missouri
As discussed above, garnishment comes after the creditor has already obtained a judgment in court. That means that the debtor already had his or her day in court and a chance to try to prove that he or she did not owe the creditor any money.
With the creditor’s right to payment already determined, the debtor often has relatively little involvement in the garnishment. After all, garnishment is a matter of getting a court order against the garnishee, not the debtor. The creditor does this through a legal process directed against the garnishee, in which the creditor shows that it has a valid judgment which has not been paid, and that the garnishee has in its possession or control funds of the debtor which can applied to the judgment.
Since the garnishee does not have a direct stake in the garnishment—the money being garnished does not belong to it, but to the creditor—it cannot directly oppose the creditor’s claim or right to garnishment. The garnishee can show that it doesn’t owe the debtor as much as the creditor claims (if anything!); however, assuming that it does have money belonging to the debtor which can be used to satisfy the creditor’s judgment, it will typically be ordered at the end of the process to turn some of that money over to the creditor.
Since the issues involved in garnishment are fairly straightforward, the process is comparatively fast and inexpensive, though the parties need to comply with the legal rules for garnishment in their state. Most of the process will consist of the creditor laying out its claim for garnishment and the garnishee verifying the money or debt (if any) it is holding for the debtor. More on Stopping Wage Garnishment in Missouri.
Getting Legal Help
As alluded to above, it’s difficult to challenge the debt itself at the late date of the garnishment—that should have been resolved during the earlier litigation which resulted in the creditor’s judgment. However, that does not mean that the debtor cannot fight or challenge the garnishment. Even without re-trying the earlier case, it can still dispute garnishment on the following grounds:
- Mistake—the creditor has named the wrong person, or has the amount of the debt wrong
- Statute of limitations—the debt or the judgment is too old
- Procedure—either in granting the original judgment or in the current garnishment, the creditor has not followed proper legal process (especially process pertaining to putting the debtor on notice of the claims against it)
- Disposable income—it may be possible to show that much of the debtor’s income is exempt, and therefore there is less disposable income available to garnish
A lawyer can be very helpful to a debtor, in challenging garnishment on what primarily amount to legal procedural grounds.