“Continuous” Wage Garnishment Approved in MissouriAugust 7, 2015
Obtaining a judgment against a debtor is just the prelude to the work of collecting the judgment. Creditors have various tools to collect judgments, and Missouri, like many states, allows garnishment of a debtor's wages, subject to applicable exemptions. For decades, Missouri law provided for a wage garnishment that required a deduction from a debtor's paycheck for a given period of time, generally between 30 and 180 days. The garnishment expired at the end of the given time, and any junior garnishments (i.e., garnishments served after the initial garnishment) would be honored in the order of the time they were received if their time period had not expired. This process required the original judgment creditor to closely monitor the status of the garnishment and to renew the garnishment at the end of the period.
Now, however, Missouri has revised its garnishment statute to allow a judgment creditor to impose a "continuous" wage garnishment on a judgment debtor. Effective as of January 15, 2015 (in Missouri Revised Statute § 525.040), a judgment creditor may serve a notice of continuous wage garnishment on the debtor's employer, and if no other garnishments are currently in effect regarding the debtor, the garnishment will apply "until the judgment is paid in full or the employment relationship is terminated, whichever occurs first[.]" Judgment creditors will no longer have to continuously monitor their wage garnishments and issue new garnishments at each interval.
In conjunction with the revision to the garnishment statute and the adoption of continuous wage garnishments, the Missouri Supreme Court recently (on June 25, 2015) ordered the revision of many of the garnishment rules, with the new rules becoming effective on January 1, 2016. New Rule 90.01(e) defines "continuous wage garnishment" 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." Under new Rule 90.19, judgment creditors must file a statement of judgment balance that indicates all payments received by the creditor within the preceding six months and the remaining balance due. The statement must be filed within 15 days after the expiration of the first six months of the garnishment, and if the statement is not timely filed, the court may dismiss the garnishment, and a junior creditor likewise may request dismissal of the garnishment.
New Rule 90.07 will require an employer that receives a continuous wage garnishment to identify all senior garnishments already in place and inform the garnishing creditor upon the release, satisfaction or termination of a senior garnishment.
The revised garnishment statute already enacted and the revised Rules coming into effect provide a judgment creditor with a strong tool to use in collecting from employed judgment debtors, streamlining the garnishment process and reducing judgment enforcement costs. Now is the time creditors should start taking advantage of these options in collecting judgments.