Dealing with Gurstel Law Firm in Minnesota: What You Need to Know

Who is Gurstel law firm?

Gurstel Law Firm is a debt-collection law firm headquartered in Golden Valley, Minnesota. Their attorneys regularly appear in Minnesota courts and also handle collection matters in Arizona, California, Iowa, Nebraska, Nevada, Utah, and Wyoming.

They represent major banks, credit-card issuers, and debt buyers, and they’re experienced at moving quickly toward judgment.

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If You’re Sued by Gurstel: Your Options

If you’ve been served with a summons and complaint, you typically have three paths:

1. Defend the case – Serve a written Answer within 21 days and raise any valid defenses (e.g., statute of limitations, identity/authorization issues, assignment proof for debt buyers).

2. Negotiate a settlement – A timely Answer often improves leverage and may reduce total cost/risk.

3. File bankruptcy – For some clients, Chapter 7 or 13 stops the lawsuit and addresses other debts.

Start here: Minnesota Debt Collection Lawsuit Guide: Part 1—Summons & Complaint and Part 2—The Answer

Want a roadmap after you answer? Part 3—After the Answer

Heads-up: Gurstel’s lawyers know Minnesota court rules well. Missing the 21-day Answer deadline often leads to a default judgment. This happens without a hearing and no judge reviews the case.

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If Gurstel Is Garnishing You: How to Stop It

If your wages or bank account are being garnished, you generally have four ways to stop it:

1. Claim an exemption (if you qualify)

2. Negotiate a settlement

3. Vacate the judgment (in limited circumstances)

4. File bankruptcy

Learn the pros/cons: Minnesota Garnishment Guide

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Why Talk to a Lawyer Early?

• The 21-day Answer deadline is unforgiving.

• Good defenses can be waived if not raised.

• Even if settlement is your goal, a prompt, proper Answer can improve the deal.

• A judgment opens the door to garnishment and liens.

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Gurstel Law FAQs

How long do I have to respond to a Gurstel lawsuit in Minnesota? You must serve a written Answer within 21 days of being served, or the creditor can get a default judgment administratively.

My summons doesn’t have a court file number, is it real or fake? Real. Minnesota allows “pocket filing,” so collectors can serve before filing with the court. You still must Answer.

Do I have defenses against a Gurstel lawsuit? Possibly. Common defenses include statute of limitations, unauthorized use/fraud, payment/settlement, and where applicable, a failure to prove assignment by a debt buyer. The right defenses depend on your facts.

Can you help if Gurstel is already garnishing me? Yes. We’ll assess exemptions, settlement, vacating the judgment, or bankruptcy based on your goals and risk.

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Need help dealing with Gurstel Law Firm?
Schedule a consult with debt defense lawyer Todd Murray.

Since 2009, Todd has helped hundreds of Minnesotans dealing with debt collection by Gurstel Law. His work has saved his clients lots of money and many sleepless nights. Todd’s clients describe him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.

In Minnesota and ready to talk to a lawyer about 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.

What is wrongful repossession?

what is repossession?

When you buy a vehicle on credit, the contract will give the lender the right to take back the vehicle if you fall behind on your loan payments. In Minnesota, most repossessions are done by “self-help,” meaning without any court oversight.

How to know if a repossession is wrongful

In a self-help repossession, the lender has to follow certain steps, otherwise the repossession may be illegal:

• You must be behind on payments. Seemingly, this would go without saying, but we occasionally see cases involving people who weren't late on their payments when their vehicle was repossessed. I've also heard of situations where the vehicle was repossessed even after the loan was paid in full.

• The repo agent can't breach the peace during the repossession.  Although there isn’t a bright line definition of a breach of the peace, it typically occurs when the repo man has to resort to force or threats of force to take your vehicle.

• The repo man can't break into a locked garage. Minnesota law forbids the repossession agent from breaking into your garage to seize your vehicle. However, this rule is a little fuzzier if you share a garage with other people, like in an apartment building.

• The police can’t actively help the repossession. Sometimes, the repo company enlists the local police department to stand by during the repossession. As long as the police merely stand by to keep the peace, it’s probably not illegal. However, if the officers actively engage in the repossession, the repo may be against the law.

  Most of the courts that have looked at this issue have found that the police may act to diffuse a volatile situation, but may not aid the repossession agents in such a way that the repossession would not have occurred but for their assistance. If the police threaten you with arrest or command you to turn over the vehicle, they've probably crossed the line from keeping the peace into active involvement.

If your vehicle was wrongfully repossessed, you can sue for damages.

If the repo company wrongfully repossess your vehicle, you can sue them (and the lender) for damages. Depending on the circumstances, the defendants may have to pay your attorney fees and court costs.

What to watch for after your vehicle was legally repossessed

Even if the repossession was strictly by the book, there are a number of things you need to know about the post-repossession process. In most cases, once your lender repossesses the vehicle they will sell it at an auction and apply the sale proceeds to your loan balance. Keep an eye on a few things during this process:

• The lender must send you a letter before and after the sale. The pre-sale letter must tell you when, where, and how the vehicle will be sold. It must also tell you how much money you have to pay to get the vehicle back. The post-sale letter must tell you how much the vehicle was sold for and explain whether you still owe money on the loan.

• You may get sued if there is still a balance on your loan. This is called a deficiency lawsuit. It happens in cases where the auction sale proceeds were not enough to pay off the full balance of the loan. In this case, the lender may sue you to recover the remaining balance. Fortunately, there are a number of ways to defend a repossession deficiency lawsuit.

What to do if your vehicle hasn't been repossessed yet

If the lender is threatening to repossess, but hasn't seized your car yet, there are some options to avoid the repossession:

• Can you re-finance the loan so that you can better afford the payments? Credit unions may offer better rates than more conventional auto lenders.

• Can you sell the vehicle to a private party and get enough cash back to repay the loan? This is probably a long shot, but may be worth exploring just to cover all your bases.

• Is filing bankruptcy an option? Both Chapter 7 and Chapter 13 bankruptcy may provide you with a number of attractive solutions to avoid repossession.

If you’ve explored all of these options with no luck, and repossession seems like a sure thing, here are some tips. First, keep all letters and documents related to the repossession, including the envelopes. Second, remove any non-essential personal property from your car (don’t forget the glovebox and trunk). Make a detailed list of stuff that you must keep in the car, like jumper cables, child seats, flashlights, tools, etc. Or better yet, take pictures or video. Finally, keep in mind that you don’t have to consent to the repo man entering your house or garage. But never use violence against the repo man. Keeping your car isn’t worth risking a dangerous confrontation.

Be very careful about hiding your vehicle to prevent a lawful repossession

Under Minnesota law, it may be a crime to refuse to disclose the location of, or otherwise conceal, a vehicle that your lender is legally entitled to repossess. The penalties include a hefty fine or even imprisonment. It’s fine to park your car in your garage, but be really careful about hiding or concealing it somewhere else to evade a lawful repossession.

Ready to talk to a lawyer about a repossession in Minnesota?
Schedule a free consult with attorney Todd Murray.

Since 2009, Todd has been helping Minnesotans combat wrongful repossessions and defend repo deficiency lawsuits. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.

Debt collectors cannot lie to you

The Fair Debt Collection Practices Act forbids a debt collector from making any false or misleading statements when they are attempting to collect a debt. If a debt collector lied to you, here's what you need to know about your rights under the FDCPA.

The FDCPA applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the false statement was made by a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.

Common debt collection lies

Although the FDCPA is clear that virtually any false statement is a violation, there are some collection lies and misleading statements that seem to happen frequently. These include:

• Telling you that you owe a debt that you already paid or that was discharged in bankruptcy

• Threatening to sue or garnish you after the statute of limitations has expired;

• Incorrectly reporting information on your credit report;

• Mis-stating your rights in student loan collections;

• Claiming that you personally owe a debt you have no obligation to pay, such as a debt for an ex-spouse or a deceased relative;

• Incorrectly stating the balance of your account (possibly because of unauthorized fees or uncredited payments);

• Suggesting that they are affiliated with an attorney when they are not;

The false statement probably has to be "material"

Although the FDCPA doesn't say anything about it, many courts have adopted a rule that the false statement has to be "material." This generally means that it's not enough to show merely that the debt collector lied to you. You must also show that they lie impacted your ability to evaluate your options in some way. In my opinion, any statement about the balance of the account, the legal status of the account, your legal rights, or the collector's legal remedies should be considered material.

If a debt collector lied to you, hold them accountable under the FDCPA

The FDCPA gives consumers the power to sue a debt collector that violates the law. It’s a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

• Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);

• Provable actual damages (including for emotional distress);

• Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

How to defend a repossession deficiency lawsuit

If you’re being sued for a repossession deficiency, use our Minnesota Collection Lawsuit Guide to familiarize yourself with the process.

After your lender repossesses your car, they will sell it and apply the sale proceeds to your loan. In most cases, there will still be a deficiency remaining. More often than not, your lender will then sue you for that deficiency. If that happens, here are some possible defenses to the deficiency lawsuit:

• Total amount of credit provided was less than $7,500. Under Minnesota law, if the total amount of the loan was $7,500 or less, than the creditor cannot chase the borrower for a deficiency.

• Statute of limitations. In most Minnesota debt collection cases, such as credit cards, the statute of limitations is six years. However, the statute of limitations for a repossession deficiency claim is likely four years. If the creditor brings the deficiency lawsuit over four years after you made your last payment, the statute of limitations on the claim may have passed.

• Incomplete or ineffective assignment of the loan. Like credit card debts, many repossession deficiency accounts are sold to third-party debt buyers. The debt buyer must be able to provide a complete and detailed chain of title of ownership of your account.

• The sale of your car after repossession was not commercially reasonable. The general rule is that every aspect of the sale of a car after repossession must be commercially reasonable. This essentially means that the creditor must act in good faith and use its best efforts to get a fair price for your car.

• The lender failed to send you the required pre- and post-sale notices. The pre-sale letter must tell you when, where, and how the vehicle will be sold. It must also tell you how much money you have to pay to get the vehicle back. The post-sale letter must tell you how much the vehicle was sold for and explain whether you still owe money on the loan. Failure to send these letters may prevent the lender from collecting a deficiency.

It's also possible that the creditor may not have followed the proper procedures when they repossessed your car. This may allow you to bring a counterclaim against them in the deficiency lawsuit. While a counterclaim is not technically a defense to a deficiency lawsuit, a valid counterclaim can often lead to a reasonable settlement of the deficiency claims or even offset the deficiency claim altogether.

Ready to talk to a lawyer about a Minnesota deficiency lawsuit?
Schedule a consult with attorney Todd Murray.

Since 2009, Todd has been helping Minnesotans combat wrongful repossessions and defend repo deficiency lawsuits. 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 Guide to Chapter 13 Bankruptcy: Part 4—The Process

Part 1—Chapter 13 Basics
Part 2—Benefits of Chapter 13
Part 3—How Your Plan Payment is Calculated

HOW DO I GET STARTED?

The Chapter 13 process starts when you hire a lawyer. We offer consultations by phone or video for your convenience. Once you decide it’s time to move forward, we’ll send you a services agreement to review and sign electronically. We also accept electronic payments. Our online questionnaire is easy to use and can be completed at your convenience.

What Does Chapter 13 cost?

In Chapter 13, you pay a flat fee out-of-pocket. When you're in financial trouble, you want predictability. You don't want your lawyer to run up the bill on you. That's why we quote you a flat fee at the beginning of the process, and that's what you pay. We agree on it at the start so you can plan for the expense.

Unlike Chapter 7, you don't need to pay your whole fee upfront in Chapter 13. In fact, in many cases Chapter 13 costs less up front than Chapter 7. We generally require a minimum of $1,000 before filing in a Chapter 13, but this can depend on your case.

What happens after you file your case?

As soon as the case is filed with the court, your bankruptcy protection begins. No creditors can call, write, or sue you, and any pending foreclosures, repossessions, or garnishments must stop immediately. After that, you’ll get a date for your bankruptcy meeting of creditors.

What is the meeting of creditors?

A meeting of creditors is a short interview that happens in person, or by phone/video. The bankruptcy trustee will go over your assets, debts, income, and expenses with you, and make sure you’re paying an appropriate amount to your creditors. Once we get the trustee and your creditors to agree to the plan, your case will be on track to get confirmed.

What happens after the plan is confirmed?

Once your case is confirmed, there’s not usually much to do in your case other than make your plan payments. We’ll generally check in every year around tax time, and you’ll have to let your lawyer know if you are having trouble making your payments so you can get some help. Because of your bankruptcy protection, your creditors will be breaking the law if they contact you after you file Chapter 13, so you should let your bankruptcy lawyer know right away if a collector is calling. We can put a stop to the calls and may even be able to get them to pay you for breaking the law.

Part 1—Chapter 13 Basics
Part 2—Benefits of Chapter 13
Part 3—How Your Plan Payment is Calculated

The Minnesota Guide to Chapter 13 Bankruptcy: Part 3—How Your Plan Payment is Calculated

Part 1—Chapter 13 Basics
Part 2—Benefits of Chapter 13
Part 4—The Chapter 13 Process

Chapter 13 involves paying your disposable income to creditors over a three or five-year period. Whatever isn't paid during that period is wiped out. But to figure out whether Chapter 13 is a good option, you need to know exactly how much your monthly payment will be. Here’s how we figure that out.

First, We predict your future income

To figure out your Chapter 13 payment, we need to predict your future income. We start by averaging out your income over the past six months. This amount can then be adjusted to account for changing circumstances, for example if you have just taken a pay cut or you know you won't be receiving the same amount of overtime.

Next, we predict your future expenses

Next, we figure out your expenses. We look at all the expenses that are necessary to take care of your family's needs: food, rent/mortgage, car payment, utilities, etc. We also look at things that you know you’ll be spending, like car repairs, home maintenance or dental work. Then we look at things you should be spending on, but haven't because you've been in financial trouble. This can include health insurance and other medical expenses, sometimes a 401(k) or life insurance, etc. If there's something that's not on our list of ordinary expenses, that doesn't mean we can't deduct it, as long as we can explain why it’s reasonable and necessary.

Once we count all these expenses, we subtract them from income and we get an idea of your disposable income.

Your attorney will help maximize your expenses

As your attorney, it’s our job is to protect the money that’s necessary for you to take care of yourself and your family. So we ask for two things: 1) verification of your expenses, so we can prove that you actually need to spend that money; and 2) information on why your expenses are reasonable and necessary.

For example, one client had an $800 monthly bill for auto fuel. This may seem unreasonably high, until we realized that the client lives 60 miles from where he works. If we can explain to the court why an expense is reasonable, there is a better chance it will be allowed.

THe payment has to be enough to cover required debts

Chapter 13 payments must be large enough to pay certain required debts. For example, if you are trying to get current on a mortgage, your total plan payments must cover the amount of your mortgage arrears. Plan payments also must cover any secured debt (car loans) that end within the plan period. Also, plan payments must cover any priority debt, such as some tax debt or government penalties within the plan period. If the total plan payments are enough to pay all of these required debts over the plan period, then your plan can be approved.

The payment has to treat your creditors fairly

If you have non-exempt property that you’re looking to protect in a Chapter 13, your Chapter 13 payments must be at least the value of your nonexempt property. In other words, in Chapter 13 your unsecured creditors can't receive any less in the plan than they would have received in Chapter 7 if your nonexempt property was liquidated.

Part 1—Chapter 13 Basics
Part 2—Benefits of Chapter 13
Part 4—The Chapter 13 Process

The Minnesota Guide to Chapter 13 Bankruptcy: Part 2—Benefits of Chapter 13

Part 1—Chapter 13 Basics
Part 3—How Your Plan Payment is Calculated
Part 4—The Chapter 13 Process

There are many benefits of Chapter 13 bankruptcy versus a Chapter 7. A few of them are obvious, but some are a little more hidden. Here are a few:

You get to keep your stuff

In Chapter 13, you don’t have to worry about losing your car to pay your creditors. Instead of giving up your stuff, Chapter 13 allows you to keep everything as long as you’re paying enough to your creditors.

You can stop foreclosure permanently

Both Chapter 7 and 13 bankruptcy allow you to pause the foreclosure process. In Chapter 7, however, once the bankruptcy is done the mortgage company can go right back to foreclosing. In Chapter 13, you can take mortgage arrears and spread them out over a three to five year period. As long as you can pay your mortgage arrears back over this time, you can stop the foreclosure permanently.

You can deal with tax debt, mortgage debt, and domestic support in flexible ways

Chapter 13 helps people deal with delinquent tax debt, mortgage debt, and past-due child support or alimony by allowing the filer to pay the debt over a longer period of time and get out of default immediately. Once the Chapter 13 is over, those debts will be paid in full.

It hurts your credit score less

Chapter 13 bankruptcy stays on your credit report for seven years, rather than the ten years a Chapter 7 stays on your record. Also, Chapter 13 has less negative impact while it’s on your credit report, because you’re paying part of your debt back instead of wiping it all out.

Attorney fees are more flexible

In Chapter 7, you’ll need to pay the entire attorney fee up front before filing. In Chapter 13, the majority of your attorney fee is taken out of your monthly payment. This means in a lot of cases, you pay very little before filing and the rest of your attorney fees is come out of your creditors’ pockets.

Part 1—Chapter 13 Basics
Part 3—Stopping foreclosure in Chapter 13
Part 4—The Chapter 13 Process

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

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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.

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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.

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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.

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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

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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 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

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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.

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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.

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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.

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 Debt Collection Lawsuit Guide: Part 1—Summons & Complaint

This is part one of a three-part series about debt collection lawsuits in Minnesota:

Part 2—The Answer
Part 3—After the Answer

What is a Debt Collection Summons?

A debt collection summons is a notice that you’re being sued to collect a debt. The summons is accompanied by the complaint, which details the allegations the creditor is making against you. We refer to a summons and complaint, collectively, as a “lawsuit.”

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What Does it Mean to Be “Served” With a Summons?

“Served” is just a fancy word for “notified.” Under the court rules, the defendant must get notice of the summons and complaint. This is typically done through personal service—where the summons is given directly to the defendant. A summons and complaint can also be served by leaving it with a person of “suitable age and discretion” at the defendant’s residence. In rare circumstances, a summons and complaint can be served by mail or even by publication in a newspaper.

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Why Doesn’t the Summons Have a Court File Number on It?

In most states, debt collectors must file a case with the court before they can serve the summons and complaint on the defendant.

In Minnesota, however, the rules are different. Here, the summons and complaint can be served on the defendant without being filed with the court. This is called “pocket filing.” Because the case isn’t filed with the court at the time of service, it won’t have a court file number on it. And if you were to call the court and ask about the case, they would have no idea what you’re talking about.

Don’t be fooled by this. Just because the summons doesn’t have a court file number on it doesn’t mean that it isn’t valid. You still have to properly respond to the summons and complaint or you will lose the case by default.

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So, What Do I Do With the Summons?

If you’re like many people, you’re tempted to do nothing and wait until you get a court date. Unfortunately, this common thinking is a huge mistake.

In Minnesota, you must answer a summons and complaint within 21 days of the date you are served. If you don’t, the creditor will apply for a default judgment. In a default case, the court considers all of the allegations in the complaint as true and gives the creditor whatever they’re asking for. In other words, the debt collector wins automatically—not because they have a better case, but because you didn't participate. In debt collection cases, a default judgment is entered administratively by a court clerk without a court hearing. In fact, in a default, a judge will never even see the case.

A default judgment is a court ruling that you owe the creditor money. And once a creditor has a judgment, they have the power to garnish your bank account and your paycheck.  Although default judgments can occasionally be overturned, for the most part they are final.

This is why it’s so important to answer a debt collection lawsuit within the 21 days. If you don't, you no longer can raise any defenses and will probably have to either negotiate a settlement or consider bankruptcy.

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What’s Next in This Series

This is Part 1 of our Minnesota Debt Collection Lawsuit Guide. We also cover:

Part 2—The Answer
Part 3—After the Answer

Ready to talk to a lawyer about your collection lawsuit?
Schedule a consult with debt defense lawyer Todd Murray.

Since 2009, Todd has helped hundreds of Minnesotans defend debt collection lawsuits. His work has saved his clients millions of dollars (and many sleepless nights). Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.