Introduction: When Your Paycheck Shrinks Overnight
Imagine opening your paycheck only to find that hundreds of dollars are gone, not because of taxes or benefits, but because a creditor got permission to garnish your wages. For many Minnesotans, this is the breaking point. You were barely keeping up with rent, groceries, and gas before, now you’re being forced to live on even less.
The good news? Wage garnishment in Minnesota doesn’t have to continue. Bankruptcy can stop it — immediately. In this guide, we’ll explain how garnishment works, what your options are, and why Chapter 7 or Chapter 13 bankruptcy may be the fastest way to protect your income and get your finances back under control.
What Is Wage Garnishment in Minnesota?
Wage garnishment is a legal process that allows creditors to take a portion of your paycheck to satisfy a debt. In Minnesota:
Most creditors can garnish up to 25% of your disposable earnings (the amount left after taxes and certain required deductions).
Some debts, like child support or tax obligations, can be garnished at even higher rates.
Garnishment typically begins only after the creditor wins a judgment against you in court.
This means if you’ve been sued and lost and the creditor can ask the court for permission to garnish. Once granted, your employer is legally required to withhold part of your paycheck.
Why Wage Garnishment Hits So Hard
For many families, losing 25% of a paycheck is devastating. That’s money for:
Rent or mortgage
Groceries and utilities
Car payments and insurance
Medical bills and child care
Garnishment doesn’t leave room for the essentials, much less catching up on other debts. And once it starts, it can continue paycheck after paycheck until the debt is fully paid, unless you take action.
Options to Fight Wage Garnishment in Minnesota
You may have heard about ways to fight garnishment:
Claiming exemptions: Minnesota law protects certain income, like Social Security, unemployment benefits, or child support. If your income is exempt, you can file paperwork to stop the garnishment.
Negotiating with creditors: Sometimes, creditors will agree to stop garnishment if you can pay a lump sum settlement.
Waiting it out: Eventually the debt is paid in full, but this could take months or years, and in the meantime you’re living on a fraction of your income.
These options can help, but they rarely solve the bigger problem: the underlying debt and the stress that comes with it.
How Bankruptcy Stops Wage Garnishment
The most powerful way to stop garnishment is by filing bankruptcy. Here’s why:
The Automatic Stay
As soon as your Chapter 7 or Chapter 13 case is filed in Minnesota, the court issues an automatic stay. This is a legal order that immediately halts:
Wage garnishments
Bank account levies
Foreclosures and repossessions
Collection calls and lawsuits
Your employer must stop withholding from your paycheck, usually before your next pay period.
Chapter 7 Bankruptcy
Garnishments end the moment your case is filed.
Most unsecured debts, like credit cards, medical bills, and payday loans, are wiped out in about 3–4 months.
You keep most, if not all, of your property under Minnesota exemptions.
Chapter 13 Bankruptcy
Garnishments stop immediately upon filing.
You repay certain debts (like mortgage arrears, car loans, and some taxes) through a 3–5-year plan.
Unsecured creditors often receive little to nothing.
For many clients, the biggest relief is instant breathing room, you finally keep your full paycheck while we tackle the bigger debt picture.
A Realistic Example
Take “Sarah,” a Brooklyn Park resident earning $1,600 every two weeks. After taxes, her disposable income is $1,400. A creditor garnishes 25%, or $350, each payday. Suddenly she has only $1,050 to cover rent, food, and transportation.
After filing Chapter 7 bankruptcy:
The wage garnishment stops immediately.
The $350 stays in her pocket.
The underlying debt (a $12,000 credit card judgment) is discharged within months.
Instead of struggling for years, she gets a fresh start.
Bankruptcy vs. Short-Term Fixes
Exemptions: Only protect certain income types — not wages from your job.
Negotiation: Creditors may agree to stop the garnishment, but you’re going to have to come up with the full balance, or close to it, in a lump sum payment.
Waiting it out: You could lose thousands before the debt is gone.
By contrast, bankruptcy not only stops the garnishment, but also erases or restructures the debt itself. It’s a solution for today and tomorrow.
Common Myths About Wage Garnishment and Bankruptcy
“Bankruptcy won’t stop garnishment once it’s started.” False — the automatic stay stops it immediately.
“I’ll lose everything if I file.” False — most Minnesotans keep their home, car, and essentials.
“Everyone will know I filed.” False — unless you’re a public figure, it’s unlikely anyone will know.
“I’ll never get credit again.” False — many people see their scores improve within 1–2 years.
Conclusion: You Don’t Have to Live With Garnishment
If your paycheck is being garnished in Minnesota, you don’t have to accept it as your new normal. Bankruptcy may stop garnishment immediately, protect your income, and erase the debts causing it.
In Minnesota and ready to talk about stopping a wage garnishment with bankruptcy?
Schedule a free consult with bankruptcy lawyer Todd Murray.
Since 2009, Todd has helped hundreds of Minnesotans get out of debt. His work has saved his clients millions of dollars (and many sleepless nights) in the process. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.