A debt collector is taking my paycheck. What do I do?

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One of the most frequent reasons we get called to help people fight debt collectors is when a person's wages are taken hostage. It's called garnishment, and it's one of the most powerful ways a debt collector can get your money. A garnishment can hit unexpectedly, and can cause lots of problems, especially that you might not be able to make your bills for the next month. Here are some of the rules around garnishment, and some tips to help you deal with it.

You can't be garnished unless you've been sued

To get a wage garnishment against you, a debt collector must first sue you. They can win their case by fighting you in court, but occasionally, you didn't get notice of the lawsuit and the collector can get a default judgment because you didn't show up for court. If a debt collector takes your wages before you've been sued, it's most likely not a garnishment, and therefore is probably illegal. To see if you have a judgment against you, check out the Minnesota courts judgment search.

They can't take your whole paycheck

In Minnesota, if a debt collector wants to take your wages, it must send you a "wage exemption notice" at least 10 days before it takes your money. You may be exempt from garnishment if you received public benefits in the past six months or if you were recently released from prison). If that's the case, you must fill out the exemption notice and return it to the collector's attorney within 10 days.

If you aren't fully exempt, there are still limits to what can be taken. You can keep 75 percent of your "disposable earnings"--i.e. your gross income minus your taxes--or 40 x the minimum wage per week (currently $320).

Child support has different rules

If you are being garnished for child support, forget everything I've said. More than 50 percent of your wages can be taken, and there are very few ways to escape being garnished.

There are ways to put a stop to garnishment

One way to stop a garnishment if you haven't appeared in court yet is to reopen a default judgment. This may be something you can do on your own, but it's best to consult an attorney because it can be tricky.

It is also possible to settle the debt for less than you owe. We can help you negotiate judgments.

Another way to stop a garnishment is filing bankruptcy. Not only will a Chapter 7 or Chapter 13 bankruptcy stop wage garnishment in progress, but you also can recover money that was garnished within the last 90 days.