Yikes!  I’m being garnished?  What can I do?

If you’ve not been paying on a debt (e.g., a credit card or medical bill) the creditor might eventually bring a lawsuit against you.  If the creditor brings a lawsuit against you and is granted a judgment on that debt it can use the judgment to start collection actions through a garnishment order (sometimes referred to as “writ of garnishment” or “writ of attachment” or “attachment order”).

The most common collection action against debtors is garnishment of wages and/or bank accounts.  That is, the creditor is using a legal process to seize some of your earnings and/or money from your bank accounts.

Missouri (See Missouri Statute § 525-030) and Kansas (See Kansas Statutes § 60-703 and § 60-734 ) both allow creditors to garnish wages, bank accounts and to seize other assets.  However, a creditor cannot take all your wages.  There are limits on the amount of earnings (wages, salary, commission, bonuses, etc.) which can be garnished.

In Missouri, the amount that may be held from a person’s weekly wages, after withholdings required by law (usually taxes only), is the lesser of:

• 25% of the wages,
• 10%, if the person is head of a family and a Missouri resident, or
• The amount by which the weekly earnings exceed thirty times the federal minimum hourly wage.
• Child support and alimony recipients can garnish up to 50%-60% depending on the circumstances and might even be entitled to 5% more for payments more than 12 weeks in arrears.
• The Department of Education can garnish up to 15% of disposable income due to defaulted student loans but not more than thirty times the federal minimum hourly wage.

In Kansas, the amount that may be held from a person’s weekly wages, after withholdings required by law, is the lessor of:

• 25% of the wages, or
• The amount by which the weekly earnings exceed thirty times the federal minimum hourly wage.
• Child support and alimony recipients can garnish up to 50%-60% depending on the circumstances and might even be entitled to 5% more for payments more than 12 weeks in arrears.
• The Department of Education can garnish up to 15% of disposable income due to defaulted student loans but not more than thirty times the federal minimum hourly wage.

If a creditor has a garnishment order against you there are some things you should consider:

• Assert any exemptions which apply to you.
  1. If money in a joint bank account is garnished and that money is from the earnings of someone who the creditor does not have a judgment against then have that joint account holder claim the earnings as exempt.
  2. In Missouri, if you are the “head of household” you can claim that as an exemption and only 10% of disposable income (generally calculated as gross earnings minus taxes) will be garnished.
  3. You might be able to assert exemptions against garnishment of public benefits/assistance such worker’s compensation, unemployment benefits, aid to families with dependent children, general assistance and welfare benefits.
• In Missouri, there is a “continuous” wage garnishment, meaning the wage garnishment order stays in effect until the debt is fully satisfied.
• In Kansas, private pensions and retirement funds are exempt from creditors.
• Social security is generally exempt from creditors, except not from child support/alimony and tax authorities.
• Child support and alimony garnishments can result in 50%-60% of disposable income being taken depending on the circumstances and might even be for another 5% for payments more than 12 weeks in arrears.
• Some creditors can garnish your wages even without obtaining a judgment against you.
  1. Examples include federal and state taxing and/or administrative authorities, court-ordered child support and arrears, and defaulted federal student loans.
• Don’t keep much money in a bank account.
• Consider doing a bankruptcy.

A personal bankruptcy is often the only way to stop a garnishment.  You should talk over your options with an experienced bankruptcy attorney.

By Errin Stowell, W M Law Attorney