Garnishment

The Minnesota Garnishment Guide: Part 1—Garnishment Basics

This is part one of a four-part series about garnishment in Minnesota:

Part 2—How to Stop Garnishment
Part 3—Claiming Garnishment Exemptions
Part 4—Wrongful Garnishment

What is garnishment?

If your paycheck suddenly shrank or your bank account was frozen, you may have been hit with a garnishment. This is one of the most stressful moments Minnesota consumers face.

Garnishment allows debt collectors to take money directly from your wages or bank account to pay a debt. Although Minnesota law technically permits garnishment before a judgment, most garnishments happen after a court has entered a judgment against you.

Collectors must follow strict legal procedures, and when they don’t, the garnishment may be wrongful or even illegal.

Bank Garnishment Basics

Here’s how bank garnishment works:

  • A debt collector sends a garnishment summons to your bank.

  • On the day the bank processes it, the bank must freeze and seize the money in your account.

  • You don’t get advance notice — you only learn after the money is taken.

This can cause overdrafts, bounced checks, and other financial chaos. Minnesota law gives you some protections, but you have to act quickly to claim them.

Wage garnishment basics

Wage garnishment starts with a Notice of Intent to Garnish sent to you. The debt collector must then wait 10 days before sending a garnishment summons to your employer.

Once your employer receives the summons, they must take up to 25% of your after-tax wages each pay period until the debt is paid.

For many Minnesota workers, this means losing hundreds of dollars from every paycheck.

What’s Next in This Series

This is Part 1 of our Minnesota Garnishment Guide. Next, we cover:

Part 2—How to Stop Garnishment
Part 3—Claiming Garnishment Exemptions
Part 4—Wrongful Garnishment

Ready to talk to a lawyer about garnishment?
Schedule a consult with debt defense lawyer Todd Murray.

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Since 2009, Todd has helped hundreds of Minnesotans defend garnishments. 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.

The Minnesota Garnishment Guide: Part 2—How to Stop Garnishment

This is part two of a four-part series about garnishment in Minnesota:

Part 1—Garnishment Basics
Part 3—Claiming Garnishment Exemptions
Part 4—Wrongful Garnishment

How to Stop a Garnishment in Minnesota

There are four ways to stop a garnishment in Minnesota: (1) claim an exemption; (2) negotiate a settlement; (3) vacate the judgment; and (4) file bankruptcy. Here’s an in-depth look at each of these options.

Option #1: If you get need-based assistance, claim an exemption

The first way to stop a garnishment in Minnesota is to claim an exemption. Exemptions are legal reasons why your paycheck or bank account are protected from garnishment. Exemption laws vary by state. In Minnesota, some common exemptions are:

  • Creditors cannot take your social security or other need-based government aid from your bank account.

  • If you received need-based government aid within the last 6 months, your wages cannot be garnished at all.

  • In most other cases, creditors can only take 25% of your paycheck.

Important caveat: if you’re being garnished for child support, alimony, or many types of government debt (including federal student loans) the rules are different. 

WHO IS CLAIMING AN EXEMPTION THE RIGHT OPTION FOR?

Anyone who qualifies for it. If your circumstances allow, you should assert your exemption to stop the garnishment and get your money back. But remember, claiming an exemption doesn’t make the debt go away, it just means that your money is protected from garnishment for the time being.

Option #2: If you can afford it, negotiate a settlement

A second way to stop a garnishment is to negotiate a settlement with the collector. The idea here is to get the creditor to stop the garnishment in exchange for voluntary payment.

WHO IS DEBT SETTLEMENT THE RIGHT OPTION FOR?

Anyone who can afford to pay a reasonable settlement to fully resolve the debt. If you have many debts and can’t realistically afford to settle all of them, this option probably isn’t the best choice for you.

Also, keep in mind that if the creditor is garnishing your wages for, say, $250 a month, they’re not going to agree to a voluntary settlement where you pay $100 a month. Your best bet to settle when a wage garnishment is already in place is to see if the creditor will take a lump sum payment for less than the full balance. Some creditors prefer the certainty of having some money right away rather than waiting months to get paid in full through garnishment.

Option # 3: If you meet the necessary criteria, vacate the judgment.

Another way to stop a garnishment is to vacate (undo) the underlying court judgment. If you take away the judgment, you take away the right to garnish.

To vacate a judgment in Minnesota, you’ll have to convince the judge that you have a really good reason for not responding to the creditor’s lawsuit and that you have a defense to the creditor’s claim. Further, in most cases you have to vacate the judgment within a year of its entry. 


WHO IS VACATING A JUDGMENT THE RIGHT OPTION FOR?

Anyone who didn’t receive the creditor’s lawsuit or who had a really good reason for not responding to it. For a couple of reasons, though, this is a long-shot option for most people.

  • First, you must provide strong evidence that you never received the creditor’s lawsuit or that you had a good reason for not responding. Just telling the judge “I never got it” or “I didn’t know I needed to respond” isn’t going to cut it. 

  • Second, you have to show the court that you have a valid defense to the debt. 

  • Third, while vacating a judgment stops a garnishment in the short term, the debt doesn’t go away--you just go back to the beginning of the case. 

Because of these challenges, the vast majority of people would be better off choosing one of the other three options to stop a garnishment.

Option # 4: If you have other debts, consider filing bankruptcy

The fourth way to stop a garnishment is to file bankruptcy. Bankruptcy stops wage garnishments and bank levies immediately and may allow you to get the garnished money back. Plus, unlike claiming an exemption or vacating the judgment, bankruptcy also wipes out the debt itself in most cases.

Who is bankruptcy the right option for?

Anyone who has multiple debts. While you might be able to settle one or two accounts, chances are you’re not going to be able to settle multiple debts unless you have access to significant amounts of money.

 

What’s Next in This Series

This is Part 1 of our Minnesota Garnishment Guide. Next, we cover:

Part 1—Garnishment Basics
Part 3—Claiming Garnishment Exemptions
Part 4—Wrongful Garnishment

 

Ready to talk to a lawyer about garnishment?
Schedule a consult with debt defense lawyer Todd Murray.

Since 2009, Todd has helped hundreds of Minnesotans defend garnishments. 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.

The Minnesota Garnishment Guide: Part 4—Wrongful Garnishment

This is part four of a four-part series about garnishment in Minnesota:

Part 1—Garnishment Basics
Part 2—How to Stop Garnishment
Part 3—Claiming Garnishment Exemptions

What is Wrongful Garnishment?

The Fair Debt Collection Practices Act prohibits debt collectors from doing anything that is unfair, untrue, harassing, or abusive. It also forbids debt collectors from taking action that they can’t legally take. Here are some typical FDCPA violations related to garnishments:

Making false statements in the garnishment paperwork

This could include things like: (1) claiming that they have a judgment when they don’t; (2) misstating the balance due; (3) incorrectly describing possible exemptions; and (4) instructing your employer to hold money longer than allowed (in Minnesota, 180 days).

continuing to garnish when the collector knows you’re exempt

If you’ve claimed a valid garnishment exemption and given the debt collector complete proof of your exemption, it’s illegal for them to continue with the
garnishment process. This includes making you appear at an exemption hearing when the collector already has proof of your exemption.

Threatening to garnish all of your wages

In Minnesota, a debt collector can only garnish 25% of your wages. So if a collector is lying if they threaten to garnish 100% of your wages.

garnishing for a debt you’ve already paid

If you’ve already paid the debt in full, you can’t be garnished for more money. Similarly, if you’ve negotiated a payment plan to resolve a debt and you’re current on that payment plan, a debt collector can’t garnish you.

Court judgment was vacated

Most garnishments happen after a court judgment has been entered. What if the court judgment is vacated, though? If the collection judgment is wiped out, then the collector's power to conduct a garnishment is wiped out.

Improper pre-judgment garnishment

Although most Minnesota garnishments happen after a judgment has been entered, the law does allow pre-judgment garnishments in limited circumstances. The way to tell if it’s a prejudgment garnishment is to look at the case caption. If there’s a judgment, it will list the court file number and date of the judgment. If there isn’t a judgment, it will say something like “subject to Minnesota Statutes 571.71, subd. 2.”

Debt collectors occasionally mess up this process. I've seen cases where they do a pre-judgment garnishment even though the defendant has answered the lawsuit. I've also seen cases where they garnish without sending the Notice of Intent to Garnish.

You Can Sue for Wrongful Garnishment

If a debt collector violates the FDCPA through a wrongful garnishment, you can sue them and hold them accountable for their illegal conduct. You can sue even if you owe the debt. If you win the case, you get: (1) $1,000 in statutory damages; (2) any provable actual damages--such as out-of-pocket loss or emotional distress; (3) the collector has to pay your attorney fees; and (4) the collector has to pay your court costs. Most consumer rights attorneys take FDCPA cases on contingent fee arrangements, which means you don’t have to pay any attorney fees up front.

What’s Next in This Series

This is Part 4 of our Minnesota Garnishment Guide. Next, we cover:

Part 1—Garnishment Basics
Part 2—How to Stop Garnishment
Part 3—Claiming Garnishment Exemptions

 

Ready to talk to a lawyer about garnishment?
Schedule a consult with debt defense lawyer Todd Murray.

2017_11_03 Pic.png

Since 2009, Todd has helped hundreds of Minnesotans defend garnishments. 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.