Wage garnishment is scary, whether from a debt you incurred or if you’re paying child support. Bankruptcy is one possible solution to some of your debt difficulties, including garnishing your wages. In today’s blog, the attorneys at Groce & DeArmon discuss the wage garnishment as it pertains to Missouri law.
Related Post: How Bankruptcy Can Stop Wage Garnishments
What is wage garnishment?
Wage garnishment is when a court orders your employer to withhold part of your paycheck to pay back a creditor to whom you owe money. In most cases in Missouri, creditors can garnish up to 25% of your wages and sometimes more. Wages can be garnished to repay outstanding debts on child support, defaulted student loans, consumer debts, and unpaid income taxes.
How does wage garnishment happen?
If a creditor finds that you are falling behind on payments, it cannot immediately start garnishing wages. Wage garnishment only happens after a creditor sues for nonpayment of debt, proves that you owe the claimed amount, and then wins a court order to follow through with garnishment.
Following the court order, local law enforcement will serve you, the garnishee, through either your employer or your bank. After you have been served, you have 5 to 30 days to object to the court order before the garnishment begins.
Groce and DeArmon Quick Tip: Not all creditors need to file for a court judgment before garnishing wages. If you are in this situation, contact an attorney right away.
Your Rights as a Garnishee
If you find that a wage garnishment will cause undue financial harm to you or your family, you may have certain rights, such as objecting to the court order, requesting a lower percentage of wage garnishment, or filing bankruptcy.
Objecting to Wage Garnishment
How you object to a wage garnishment varies based on the type of debt that is being collected and the state in which you live. The period of time between being served and the end of the objection period is typically very short, so it’s smart to act fast and contact a debt attorney to help you through the process.
Missouri Wage Garnishment Limits
The three types of creditors in this section have the right to garnish wages without a court order.
For child support debts, up to 50% of your disposable income earnings may be garnished if you are supporting a dependant other than the one involved in the garnishment. If you are not supporting a spouse or child, 60% of your disposable earnings can be garnished.
For defaulted student loans, creditors such as the Department of Education can garnish up to 15% of your disposable income, but not more than 30 times the minimum wage.
For unpaid taxes, the federal government can deduct taxes from your wages without a court order based on the number of dependents you have and your deduction rate. In some cases, state and local governments may also be able to garnish wages for unpaid taxes.
If you can prove you’re the head of household, meaning your income supports people such as children, spouses, or relatives, you can fill out an affidavit that allows creditors to take only 10 percent of your wages. Otherwise, a creditor can take up to 25 percent of your wages.
Filing for Bankruptcy
Filing for bankruptcy can help stop wage garnishment in many cases and help erase debt at the same time. Filing for bankruptcy will put an automatic stay in place, which will prohibit most creditors from collecting debts and seeking wage garnishment. Following bankruptcy, creditors cannot garnish discharged debts such as credit card balances, personal loans, and medical bills, but they may resume garnishment on nondischargeable debts.
Related Post: How to Prevent Wage Garnishment With a Bankruptcy Lawyer
Contact Groce & DeArmon Today
When filing for bankruptcy, it is important to know that it will not stop all wage garnishments. It is also important to know which type of bankruptcy is best for you. This is why the bankruptcy attorneys at Groce & DeArmon are here for you. Contact Groce & DeArmon, P.C. today to talk to a bankruptcy attorney.