Missouri Medical Collections: The “Head of Family” Exemption Is Costing You Thousands
On paper, Missouri looks like a creditor’s dream. The Statute of Limitations for written contracts is a generous 10 years, and the courts are generally efficient.
But there is a massive hidden trap.
Missouri has one of the strongest “Head of Family” wage exemptions in the country. While federal law allows you to garnish 25% of a debtor’s paycheck, Missouri law (RSMo 525.030) slashes that to just 10% if the debtor supports a family.
If your current agency is budgeting for a 25% recovery and gets hit with a “Head of Family” affidavit, your cash flow projections collapse instantly. Worse, if they try to garnish the full 25% without proper screening, they invite legal challenges that can stall your revenue for months.
We don’t rely on “standard” garnishment math. We use a Missouri-specific recovery model that anticipates these exemptions and secures payment through other means.
Need a cost-effective Collection Agency: Contact Us
Deep Analysis: The 3 “Show-Me State” Revenue Traps
Collecting in Missouri requires navigating strict procedural statutes that national agencies often overlook.
1. The “Head of Family” 10% Cap
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The Law: Under RSMo § 525.030, if a debtor is a “head of a family” (supporting a spouse or dependent child), you can only garnish 10% of their disposable earnings, not the standard 25%.
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The Risk: Most out-of-state agencies assume the federal 25% rule applies everywhere. They file for a 25% garnishment, the debtor files a simple affidavit claiming the exemption, and the court slashes the order. You waste legal fees for a trickle of payment.
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Our Solution: We anticipate the affidavit. We use “Step 3” negotiation to secure voluntary payment plans that are often higher than the 10% forced garnishment, by offering incentives that a court order cannot provide.
2. The “Written vs. Open” Statute Gap
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The Law: Missouri has a massive split in its Statute of Limitations.
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Written Contracts: 10 years (RSMo § 516.110).
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Open Accounts: 5 years (RSMo § 516.120).
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The Risk: Many patient intake forms are legally weak. If your registration paperwork doesn’t meet the strict definition of a “written contract for the payment of money,” the court defaults the debt to an “Open Account.” You lose 5 years of collectibility instantly.
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Our Solution: We audit your intake forms during onboarding. We classify accounts by “Contract Strength” to prioritize those approaching the 5-year cliff, ensuring we file suit before the shorter window closes.
3. The Hospital Lien “Notice” Failure
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The Law: RSMo § 430.230 gives hospitals a lien on personal injury settlements (up to 50% of net proceeds). However, this lien is only valid if proper notice is served to the tortfeasor and insurer before they pay out.
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The Risk: If the insurance company sends a check to the patient before your agency serves the formal notice, your lien is extinguished. You cannot go back and claim the money. Speed is everything.
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Our Solution: We don’t wait for “billing cycles.” When we detect an auto accident claim, we serve the statutory Notice of Lien immediately via certified mail, locking in your rights before the settlement check is cut.
Our 4-Step “Show-Me” Recovery System
We have adapted our model to leverage Missouri’s 9% statutory interest rate while navigating the garnishment caps.
Phase 1: The Contract Audit (Pre-Collection)
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The Strategy: We check your “Date of Service” against the 5-Year vs. 10-Year rule. We also scrub for Unanticipated Out-of-Network status to comply with Missouri’s “surprise billing” laws (RSMo § 376.690).
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Cost: Included in service.
Phase 2: The “Statutory Interest” Demand (Steps 1 & 2)
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The Strategy: Missouri allows for 9% statutory interest on non-tort judgments if no other rate is agreed upon (RSMo § 408.020). We include this calculation in our demand letters to show debtors that waiting to pay will cost them more.
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The Cost: Flat fee (approx. $15/account). You keep 100% of recoveries.
Phase 3: The “10% Reality” Negotiation (Step 3)
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The Strategy: We know the debtor can likely claim the “Head of Family” exemption. Instead of fighting it, we use it. “Mr. Smith, a garnishment will take 10% of your check forever and ruin your credit. Let’s agree to a fixed monthly plan that pays this off faster and keeps your employer out of it.”
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The Cost: 40% contingency.
Phase 4: Litigation & Revival (Step 4)
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The Strategy: For refusals, we file suit. Missouri judgments last 10 years and can be revived for another 10. We view judgments as long-term assets, monitoring the debtor’s financial situation for years to catch them when they eventually sell a home or get a better job.
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The Cost: 50% contingency.
Regional Strategy: St. Louis to the Ozarks
Missouri is economically diverse. We adjust our tactics based on the patient’s location.
| Region | Economic Profile | Collection Strategy |
| St. Louis / Kansas City | Urban / Corporate | High volume of “Head of Family” exemptions. We focus on bank levies (which don’t always have the same automatic 90% exemption as wages) rather than wage garnishment. |
| Springfield / Branson | Service / Tourism | Seasonal income fluctuation. We use “catch-up” plans that allow lower payments in off-peak months. |
| Rural Missouri | Agricultural | We utilize the 10-year Statute of Limitations effectively here, knowing that asset liquidity (harvests, land sales) operates on long cycles. |
FAQ: The Executive Summary
Q: What is the Statute of Limitations in Missouri?
A: It depends on your paperwork. 10 years for written contracts, but 5 years for open accounts/oral agreements. We act as if every account is a “5-year” account to be safe, unless we have a signed promissory note.
Q: Can you garnish wages in Missouri?
A: Yes, but with a catch. The standard is 25%, but if the debtor is a “Head of Family,” it drops to 10%. Note: Child support garnishments are much higher (50-65%).
Q: Can we charge interest?
A: Yes. If your contract doesn’t specify a rate, Missouri law allows 9% per annum. This is higher than many states and is a powerful motivator.
Stop letting the “Head of Family” exemption freeze your revenue.