The government has tools in place for ensuring people pay their debts. Rather than send people to antiquated debtors’ prisons, federal and state level governments have wage garnishment laws which are designed to forcibly take percentages of your income to repay debt if you failed to do it on your own.
In this guide, we shall take a closer look at Missouri garnishment laws, key legislation regulating garnishment, and how one can stop the garnishment of wages.
Wage garnishment in Missouri is a legal procedure in which a portion of a debtor's earnings is withheld by their employer for the payment of a debt. This process is governed by the Revised Statutes of Missouri, specifically under Section 525.030 and Section 525.040.
For example, Missouri follows the limitations on wage garnishment set forth by the Consumer Credit Protection Act. Under this Act, the maximum amount that may be garnished from an individual's wages is the lesser of:
25% of the debtor’s disposable earnings for that week, or
The amount by which the debtor’s disposable earnings for that week exceed thirty times the federal minimum hourly wage.
Creditors should be aware of certain types of income exempt from garnishment of wages in Missouri under the law. These exemptions protect the debtor's ability to maintain a basic standard of living and may include Social Security benefits, unemployment benefits, and some types of pension income.
Missouri residents must be aware that the aforementioned sources of income are exempt from garnishment. Apart from Social Security benefits, unemployment benefits, workers' compensation, and pensions, special rules from Missouri garnishment laws apply for child support, student loans, or unpaid federal taxes.
When it comes to child support, for example, up to 50% of a debtor's disposable earnings can be garnished if the debtor is supporting another child or spouse; this amount can be increased to 60% if there is no second child or spouse. An additional 5% may be garnished for support payments more than 12 weeks in arrears.
Before garnishment in Missouri begins, a creditor must file a lawsuit and obtain a court judgment against the debtor. Once they have this judgment, the creditor can apply for a Writ of Garnishment, which orders the debtor's employer to withhold the specified amount of money from the debtor's paycheck each pay period and send it directly to the creditor until the debt is fully paid.
Debtors receive notice of the garnishment in Missouri, and they can challenge it by claiming exemptions or taking other legal actions. In these cases, debtors should consult with a qualified attorney to understand their rights and potential remedies.
Creditors can instruct your employer to withhold a specific amount of your paycheck and forward the money directly to a sheriff or the creditor to pay off your debt. Federal and state law determine specifically how much money can be taken.
But creditors can’t just knock on the door of your employer and demand that they take part of your paycheck. They need to get an official wage garnishment Missouri order from a judgment creditor.
Federal law does have limits on how much money can be taken. The purpose of this is to ensure that you still have some money to cover your living expenses. Garnishment laws in Missouri follow the federal standard for wage garnishment limits unless you are a resident of Missouri and the head of your family, in which case state law copy becomes the rule.
Disposable earnings are referred to as whatever amount of money is left after your employer has deducted money for taxes and social security.
John is not the head of his household and after subtracting social security and taxes, John makes $500 per week. Federal minimum wage is $7 per hour. 25% of the disposable earnings is $125. By contrast, 30 times the federal minimum wage of $7 per hour is $210, which leaves $290 for garnishment. John’s employer would be legally required to garnish the lesser of these two amounts which is the 25% or $120 per week.
Now let’s look at another example for someone who is the head of household in Missouri, to whom garnishment laws in Missouri apply.
Tina is single and she supports two children so she is the head of her household. Tina makes $1,000 per week after mandatory deductions and taxes. The current federal minimum wage is $7 per hour. 10% of Tina’s disposable earnings amounts to $100. Her disposable earnings minus 30 times the minimum wage ($210) would be $790. Tina’s employer could garnish her wages to the lesser of these two amounts which would be 10%.
There are a few exceptions to Missouri wage garnishment laws. Your wages can be garnished without the organization to whom the debt is owed filing if you owe:
Most of the time, any debts you owe will eventually expire, due to a statute of limitations, which means that the company has a certain amount of time to try and collect on that debt. This is even true of unpaid income taxes.
The IRS, for example, has up to 10 years to try and collect on an unpaid debt, which is why they will usually garnish wages if they can’t get repayment halfway through that time frame.
Student loans however are one of the few types of debt that never expire so if you have defaulted student loans, they can garnish your wages indefinitely until the loans are repaid.
If a debt remains unpaid, Missouri wage garnishment laws permit an entity owed money to seek continuous wage garnishment. Legal recourse is contingent upon the debtor having employment and net earnings that can be legally garnished. Bankruptcy filings typically preclude garnishment approvals.
Dealing with wage garnishment in Missouri can be stressful, but understanding your rights and options is the first step to taking control of the situation. When wages are garnished, both you and your employer will be informed. Under federal and Missouri laws, your job is safe if you're facing your first garnishment — employers cannot fire you solely because of this single garnishment.
Yet, there's a significant twist when it comes to multiple garnishments. Should you have more than one garnishment, federal protection does not apply, and your job could be at risk. Employers may choose to terminate your employment if they find managing several garnishment orders too burdensome.
So, how to stop a garnishment in Missouri if it has affected you?
Assess your financial situation: Take a close look at your debts and consider seeking advice from a financial advisor or counselor.
Seek legal advice: A lawyer may help you understand more about your rights and possibilities, including negotiations with creditors or filing an objection to the garnishment.
Consider debt relief options: These may include setting up a payment plan or exploring debt consolidation.
Bankruptcy as a last resort: Although severe, filing for bankruptcy can halt wage garnishment and offer a fresh financial start.
Debt collection is full of complications and its nuances. If you are stuck in wage garnishment, learn garnishment laws in your state and seek a professional lawyer help, if necessary. Whether you are the head of a household facing garnishment or a creditor pursuing what is owed, garnishment laws are aimed to make all parties equal and put them in fair conditions.
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