Wage garnishment in Minnesota is a process where a creditor can collect a debt by taking a portion of your paycheck. Laws apply to the maximum garnishment amount, exemptions, and your rights as an employee.
Wage garnishment can be a stressful and confusing process, especially if you're unsure about the laws in your state. In Minnesota, the process follows specific rules and regulations that dictate how much of your income creditors can seize. Unfortunately, the answer to the question is yes, creditors have the right to levy on any available non-exempt property, and that includes a portion of your wages.
For many people facing financial challenges, wage garnishment is one of the most pressing concerns. They want to know if creditors can garnish their wages, and if so, when it can happen and how much can they take. A Minnesota wage garnishment attorney can provide detailed answers to your questions, but an overview is helpful.
How Wage Garnishments Arise
When you apply for a credit card, or any other form of credit, you are entering into a contractual agreement under which you promise to repay the lender for the credit extended. When you fail to make the payments as agreed upon, the lender has the right to pursue you for breach of contract.
Typically, the creditors begin this process by sending letters regarding the past due balance and demanding payment. After that, they may sell the debt to a collection agency that will continue to try to collect the debt. The debt may be sold one or more times before finally landing with a law firm specializing in debt collection.
Debt Collection & Wage Garnishment Under Minnesota Law
Once the debt reaches a law firm, the firm will file a complaint under Minnesota's wage garnishment statute. The complaint will state a cause for breach of contract seeking the amount owed plus attorney's fees.
Summons and Complaint
Once the complaint for breach of contract is received by the court, you will receive a Summons and Complaint. You will be given a period of time in which you must respond if you wish to dispute the claim. Normally, there are not any defenses that you can present, so the end result of this process is that the judge enters a default judgment in favor of the creditor.
Notice of Docketing of the Judgment
After the judgment is entered, you should receive a Notice of Docketing of the Judgment, which is a step that must occur before the creditor may begin the garnishment process. Once the creditor is able to garnish an individual’s wages, they will typically send a Request for Disclosure, and a Notice of Intent to Garnish which includes a Garnishment Exemption form.
Request for Disclosure
If you receive a request for disclosure form, you have a duty to fill it out, and failure to do so can lead to further action by the judge—i.e. requesting that you appear to explain why you have not completed the form.
Notice of Intent to Garnish and Garnishment Exemption Form
The garnishment exemption form, on the other hand, can work to your benefit and can guard against wage garnishment, if applicable, so it is always recommended to complete the form if any of the exemptions apply.
The Garnishment Summons and Wage Garnishment in MN
Once the creditor has determined your place of employment, it will send a Garnishment Summons to your employer. The summons will demand that the employer withhold twenty-five percent of your wages from each paycheck. The creditor is only allowed to garnish for a certain amount of time, then must take a break in case there are other creditors waiting in line. If not, the creditor can resume garnishment. This process can repeat until the creditor is paid in full.
Who Can Garnish My Wages in Minnesota?
Wage garnishment in Minnesota typically occurs when a creditor wins a judgment against you in court. Once the judgment is obtained, the creditor has the legal right to collect a portion of your income directly from your employer. Creditors who can garnish wages include:
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Private creditors: This includes credit card companies, medical providers, and other individuals or entities you may owe money to.
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Government agencies: Unpaid child support, back taxes, or student loans can also lead to wage garnishment initiated by federal or state agencies.
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Court orders: Child or spousal support garnishments are often the result of a court order and usually take precedence over other types of garnishments.
In Minnesota, before a private creditor can garnish your wages, they must file a lawsuit and win a judgment. Government agencies, however, can garnish wages without going to court, provided you owe back taxes or child support.
What Are the Types of Wage Garnishments?
There are different types of wage garnishments that can occur in Minnesota, each depending on the type of debt you owe. The most common forms include:
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Consumer debt garnishments: These garnishments are typically related to debts such as credit cards, personal loans, or medical bills. In Minnesota, a creditor must sue you and obtain a court judgment before garnishing wages for these types of debts.
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Tax garnishments: Both the IRS and the Minnesota Department of Revenue can garnish wages to collect unpaid taxes. These agencies do not require a court judgment to begin garnishing wages.
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Child support garnishments: If you're behind on child support payments, the court can issue a wage garnishment order. Minnesota law prioritizes child support payments over other types of garnishments.
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Student loan garnishments: If you default on federal student loans, the government can garnish your wages without a court order. This type of garnishment is known as an "administrative garnishment."
Understanding which type of wage garnishment applies to your situation can help you determine how to address the debt.
Limits on Wage Garnishment
Both federal and Minnesota state law place limits on how much of your paycheck can be garnished. These limits are designed to protect a portion of your income to ensure that you can still meet your basic living expenses.
Limits on Wage Garnishment in Minnesota
In Minnesota, state law provides multiple protections. For consumer debts, creditors can garnish up to 25 percent of your disposable earnings or the amount by which your income exceeds 40 times the state or federal minimum wage, whichever is greater.
Wage garnishment for tax debts and student loans typically follow federal limits, but the Minnesota Department of Revenue may have its own thresholds based on the specific debt owed.
Garnishments Under Federal Law
Under federal law, creditors can garnish up to 25 percent of your disposable income or the amount by which your weekly earnings exceed 30 times the federal minimum wage, whichever is less.
However, for child support, federal law allows up to 50 percent of your disposable earnings to be garnished if you are supporting another child or spouse, and up to 60 percent if you are not.
Can My Bank Account Be Garnished in Minnesota?
Yes, your bank account can be garnished in Minnesota under certain circumstances. This process, known as bank levy, allows creditors to take funds directly from your checking or savings account if they have a court judgment against you. However, certain protections exist for funds deposited in your account, especially if they come from exempt sources like Social Security benefits or veterans' benefits.
It’s important to note that, unlike wage garnishment, which is limited by federal and state law, a bank levy can freeze and seize all available funds in your account, up to the amount of the judgment. If your account contains exempt funds, you must notify the creditor or the court to prevent them from being taken.
Wage Garnishment Exemptions
Minnesota law provides several exemptions that protect certain types of income and assets from wage garnishment. These exemptions help ensure that individuals can maintain a minimum level of financial security despite having a portion of their wages garnished. Key wage garnishment exemptions in Minnesota include:
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Social Security Benefits: These benefits are generally protected from garnishment, except for debts related to child support, alimony, or federal taxes.
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Public Assistance Benefits: Income from programs such as food stamps, unemployment compensation, or workers' compensation cannot be garnished.
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Retirement Income: Pensions and retirement benefits are typically exempt from garnishment, though exceptions may apply for certain types of debts.
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Wages Below the Exemption Threshold: If your earnings fall below a certain threshold, Minnesota law prohibits wage garnishment entirely. For example, if your weekly disposable earnings are less than 40 times the federal minimum wage, your wages cannot be garnished.
Understanding these exemptions can be vital to protecting your income from garnishment and ensuring that you retain enough funds to cover your basic living expenses.
Get Legal Help with Wage Levy for Individuals
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER
Wage garnishment in Minnesota is a serious legal process that allows creditors to collect on unpaid debts by seizing a portion of your income. While federal and state laws limit how much can be garnished, it's important to know your rights and protections under Minnesota law. If you're facing wage garnishment or are concerned about its impact on your finances, it may be beneficial to seek legal advice to explore your options, including negotiating with creditors or filing for bankruptcy.
If you’re facing wage garnishment and need expert legal help, don’t wait—contact LifeBack Law Firm, P.A. today. Our experienced attorneys can guide you through your options and work to protect your finances. For a free consultation, go online or call 844.277.9650 to speak with a dedicated legal professional and get the relief you deserve.
We look forward to hearing from you to put a stop to the threat of garnishment and get your life back.
Top FAQs About Minnesota Wage Garnishment
How does wage garnishment work in Minnesota?
Wage garnishment in Minnesota is a legal process where creditors can collect debt by taking a portion of your paycheck. The process typically involves:
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A creditor obtaining a court judgment
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Sending a garnishment summons to your employer
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Your employer withholding up to 25% of your disposable earnings
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The withheld amount being sent to the creditor
Garnishment continues until the debt is paid or the garnishment period ends
What is a garnishment summons?
A garnishment summons is a legal document sent by a creditor to your employer, demanding that they withhold a portion of your wages. It includes:
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The amount of debt owed
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Instructions for withholding wages
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Information about your rights as an employee
The summons initiates the wage garnishment process and requires your employer to comply with the garnishment order
How do I fill out the MN wage garnishment exemption form?
To complete the Minnesota wage garnishment exemption form:
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Review the list of potential exemptions
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Check any that apply to your situation
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Provide supporting documentation if required
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Sign and date the form
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Return it to the creditor within the specified timeframe
Filling out this form can help protect certain income from garnishment if you qualify for exemptions
What are the wage garnishment limits in Minnesota?
Minnesota wage garnishment limits are:
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25% of disposable earnings, OR
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The amount by which your income exceeds 40 times the state or federal minimum wage, whichever is greater
For child support, limits can be higher:
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Up to 50% if supporting another child or spouse
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Up to 60% if not supporting others
These limits ensure you retain enough income for basic living expenses
