This does not happen automatically and starts by getting sued. If a creditor sues you and obtains a judgment against you, then that creditor can begin the garnishment process. Furthermore, if you are sued and don’t respond or answer that lawsuit, then a creditor may begin the garnishment as well.
Once a creditor receives a judgment, then they will send your bank or employer a notice or summons. If a creditor attempts to garnish your wages, they have to send you a Notice of Intent to Garnish Earnings. You have 10 days to respond and if you do not respond, then your wages will be garnished. If a creditor tries to garnish your bank account, they have to serve or provide your bank with a Garnishment Summons. Your bank should send you this notice and if you do not respond then your bank will freeze whatever amount the creditor is asking for in their summons.
In either instance, your funds or wages may be exempt or protected from any garnishment. However, the exemption or protection is not automatic and you have to fill out an exemption form and provide that to the creditor as evidence. Wages tied to government assistance are exempt, as well as, social security benefits, workers’ compensation, retirement pension, unemployment benefits, etc.
If a creditor tries to garnish your wages, and those wages are not exempt or protected, then the creditor may obtain 25% of your net wages. For example, let’s say you earn $1,000 before taxes and other withholdings, and you take home $500. In this case, a creditor may garnish $125.
If your wages or bank account are being garnished, one way to stop that immediately is to file bankruptcy. So, if you’re thinking of filing for bankruptcy, and or if you have questions or are ready to get your life back, reach out to Minnesota’s nicest bankruptcy law firm by going to www.lifebacklaw.com. You won’t regret it!