Senate updates bankruptcy exemptions, narrows garnishment practice and adds notification rights
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Summary
The Senate adopted a combined substitute for SB835 and SB1111 to modernize Missouri bankruptcy and garnishment statutes: raising exemption amounts, indexing them to CPI, and adding procedural protections and notice rights for joint account holders affected by garnishments.
The Missouri Senate moved a pair of bills forward that update the state’s bankruptcy and garnishment framework, increasing exemption amounts and changing how financial institutions must respond to garnishment orders.
Senator from Dallas, sponsor of the substitute combining Senate bills 835 and 1111, described the effort as a modernization of statutes to align exemption values with inflation and to provide clearer garnishment procedures. Among the changes: the homestead exemption would rise from $15,000 to $40,000 and several personal property exemptions would increase (for example, household goods and motor-vehicle exemptions were raised in sponsor remarks), with automatic CPI adjustment every three years.
A significant floor amendment clarified garnishment rules for joint accounts. The amended language requires a garnishee (the bank) to provide copies of the garnishment order to each account holder within two days, permits account holders to file objections or requests for exemption within 30 days, and allows the garnishee to pay the garnished funds into circuit court while an objection is resolved. Sponsors said debtor and creditor attorneys and stakeholder groups had worked on the language to balance protections for debtors who must provide compelled testimony with creditor rights.
Supporters said the bills update decades-old dollar thresholds and streamline garnishment practice to avoid multiple repeated withdrawals; they framed the changes as technical and protective of consumer fairness. Opponents sought clarifications about implementation and timing: several senators noted the need for new court forms and a constitutional six-month lead time for certain procedural changes. The sponsor said the effective date was set to Jan. 20, 2028, to allow necessary administrative preparations.
The Senate adopted the garnishment amendment and perfected the substitute for printing. The package moves Missouri law toward higher exemptions and an updated garnishment process designed to reduce repeated draws on accounts and provide notice and a remedy for uninvolved joint-account holders.