Garnished for 25% more than judgement

[Thepick]

What is the name of your state? MO

If a judgment was awarded on a student loan and the law firm that represented the bank garnished you beyond the judgement by almost 25%, you should be refunded that amount correct? Got a call from HR and the award was for just over 15k but payroll noticed they’ve gotten over 19k. The law firm says that’s interest but from my understanding they ONLY get the judgment amount. What’s the word on this?

 

[Zigner]

Your payroll department shouldn't have withheld more than the amount listed on the garnishment. With that said, it would be proper to add interest to the judgment amount. You should have received a copy of the paperwork related to the garnishment. Look at it. If not, ask your HR department for a copy.

 

[Thepick]

We get an annual statement, and the original
Judgement shows interested included in the garnishment amount. So they can continue charging interest even tho the judge ordered a specific amount be deducted?

 

[zddoodah]

If a judgment was awarded on a student loan and the law firm that represented the bank garnished you beyond the judgement by almost 25%, you should be refunded that amount correct?

That depends. When was the judgment entered? Was it entered in Missouri state court or federal court?

Got a call from HR and the award was for just over 15k but payroll noticed they’ve gotten over 19k.

Over what period of time was the $19k paid? At the point when the full judgment amount (plus interest) had been paid, you requested that the garnishment be terminated, right? If not, why not? If so, what happened in response to your request?

The law firm says that’s interest but from my understanding they ONLY get the judgment amount.

Your understanding is incorrect. A judgment entered in a state court in Missouri accrues interest at the rate of 9% per annum. The post-judgment interest rate on federal court judgments is quite a bit lower (with the exact amount depending on exactly when the judgment was entered. For example, if a $15k judgment is entered in Missouri state court on 7/1/21 and wage garnishment at the rate of $500 per month starts in December 2021, the judgment is going to accrue a little over $2,500 in interest over the first two years after the garnishment starts.

 

[Thepick]

I tried to attach some snapshots but can’t figure out how smh. Here’s the info:

Entered 3-18-21 @ 10% of total wages per check
Judgement balance 5570.21
Post judgement interest 11870.85
Service fee for writ 40.00
Clerk fee 10.00
Less credits 1732.25 (???)
Total remaining due 15759.73
2021 paid 4277.02
2022 paid 9361.81
2023 paid 5121.39

 

[Thepick]

Over what period of time was the $19k paid? At the point when the full judgment amount (plus interest) had been paid, you requested that the garnishment be terminated, right? If not, why not? If so, what happened in response to your request?

It was Missouri court. And we did not know it had exceeded the amount of judgment until the payroll clerk called, which I know should be better tracked and I have zero excuses.

Also, in 2024 paid an additional 1200.00 roughly.

 

[Taxing Matters]

What is the name of your state? MO
The law firm says that’s interest but from my understanding they ONLY get the judgment amount. What’s the word on this?

Pretty much every civil judgment will in the judgment amount include the actual damages awarded and the prejudgment interest. But that amount isn't static. If the judgment debtor doesn't pay it right away, then post judgment interest begins to accrue on the judgment, too. The judgment may or may not expressly state that, but the law of the jursidiction that governs the judgment will state that post judgment will accrue and specify how that interest is to be computed.

 

[Thepick]

Pretty much every civil judgment will in the judgment amount include the actual damages awarded and the prejudgment interest. But that amount isn't static. If the judgment debtor doesn't pay it right away, then post judgment interest begins to accrue on the judgment, too. The judgment may or may not expressly state that, but the law of the jursidiction that governs the judgment will state that post judgment will accrue and specify how that interest is to be computed.

Would that be listed in the order somewhere?

 

[quincy]

Would that be listed in the order somewhere?

“The judgment shall state the applicable interest rate, which shall not vary once entered.” (bolding added) Missouri Revised Statute 408.040.

 

[Thepick]

“The judgment shall state the applicable interest rate, which shall not vary once entered.” (bolding added) Missouri Revised Statute 408.040.

There’s no mention of an interest rate only the interest amount I listed above. I guess I’m confused if that’s the interest they figured beforehand, or is that the interest and late fees up to the judgment point and more can be assessed?

 

[zddoodah]

We can't reliably critique the accounting from here. However, given the payments shown in your post #5, there's no way the remaining balance should be the same as the judgment amount. I'd suggest at least consulting with a local attorney for assistance.

Also, if the judgment included prejudgment interest, then it will be stated in the judgment. It is possible, but not necessary, that the judgment will refer to post-judgment interest.

 

[quincy]

For your reference, here is a link to the laws (see MRS §408.040, Interest on Judgments):

https://law.justia.com/codes/missouri/2022/title-xxvi/chapter-408/

There was a bill introduced in Missouri that would have changed the amount of interest that could be charged on judgments but the Bill died in committee.

 

[Taxing Matters]

“The judgment shall state the applicable interest rate, which shall not vary once entered.” (bolding added) Missouri Revised Statute 408.040.

That statement is found in subsection 3 that starts out "Notwithstanding the provisions of subsection 2 of this section, in tort actions,..." (bolding added). A student loan is not a tort claim. It's a contact claim. And the interest rule for that is provided in subsection 2 which states:

2. In all nontort actions, interest shall be allowed on all money due upon any judgment or order of any court from the date judgment is entered by the trial court until satisfaction be made by payment, accord or sale of property; all such judgments and orders for money upon contracts bearing more than nine percent interest shall bear the same interest borne by such contracts, and all other judgments and orders for money shall bear nine percent per annum until satisfaction made as aforesaid.

Mo. Ann. Stat. § 408.040 (West). For contract claims, the judgment doesn't have to state the rate for the interest that accrues. Instead, it will be the larger of (1) the rate set in the contract, if any or (2) nine percent. So it appears that interest is ticking away on the judgment at a rate of at least nine percent.

 

[quincy]

That statement is found in subsection 3 that starts out "Notwithstanding the provisions of subsection 2 of this section, in tort actions,..." (bolding added). A student loan is not a tort claim. It's a contact claim. And the interest rule for that is provided in subsection 2 which states:



Mo. Ann. Stat. § 408.040 (West). For contract claims, the judgment doesn't have to state the rate for the interest that accrues. Instead, it will be the larger of (1) the rate set in the contract, if any or (2) nine percent. So it appears that interest is ticking away on the judgment at a rate of at least nine percent.

I missed the fact that the judgment was for a student loan.