Wage garnishment occurs when a creditor takes money from your paycheck or income before you receive it from your employer. Most creditors have to wait until they get a personal judgment against you before they can attempt to garnish your wages. To obtain a personal judgment, a creditor must serve you with a copy of the summons and petition or complaint. That said, your wages can be garnished without a court judgment for: unpaid income taxes, court ordered child support (ongoing and arrears), and federal student loans that are in default.
There are ways to stop garnishments, particularly if the court that entered a judgment against you lacked personal jurisdiction, i.e. creditor failed to have you personally served. In Missouri, debtors can file a motion to set aside a void judgment pursuant to Rule 74.06(b)(4) and in Kansas under 60-260(b)(4). A motion to set aside a void judgment can be made at any time in Missouri and Kansas. See e.g. Forsyth Financial Group, LLC v. Hayes, 351 S.W.3d 738 (Mo.App.W.D. 2011); and Barkley v. Toland, 7 Kan.App.2d 625 (1982). To avoid waiving a lack of jurisdiction argument, debtors should make a special entry of appearance when filing a motion to set aside under the above provisions. Debtors also bear the burden of establishing lack of jurisdiction and must present credible evidence that demonstrates lack of personal service. Evidentiary and procedural rules can be daunting for the unwary and debtors should proceed with caution if they elect to challenge a judgment without an attorney.
Bankruptcy provides another option to avoid garnishment through imposition of the Automatic Stay. Pursuant to 11 U.S.C. § 362 of the U.S. Bankruptcy Code, the Automatic Stay goes into effect immediately after a bankruptcy petition is filed. For most types of debt, the Automatic Stay prohibits creditors from suing debtors during while the bankruptcy case is pending, from taking any action to recover property from debtor, or to collect, assess, or recover a claim against debtor. To avoid the Automatic Stay, a creditor has to request and receive an order from the bankruptcy court granting stay relief. If a creditor violates the Automatic Stay, it may be liable for damages which can include attorney’s fees and costs, and even punitive damages in extreme cases. Though the automatic stay goes into effect immediately after a bankruptcy case is filed, it is always good practice to file notice of the bankruptcy in any pending lawsuits against debtor to ensure creditors have notice of the bankruptcy and take appropriate steps to, among other things, quash active garnishments. Debtors should consult with a local bankruptcy attorney to assess whether they qualify as debtors under the Bankruptcy Code and whether the Automatic Stay applies to active garnishments. In many cases, bankruptcy gives qualifying debtors immediate relief from an active garnishment and also gives them the opportunity to discharge the underlying judgment debt that is the basis for the garnishment.