A reaffirmation is an official way to “reobligate” yourself on the loan. This involves the lender sending us a reaffirmation contract to be signed by you.
What Types of Income or Funds Are Exempt from Garnishment?
In some cases, you may discover that your bank account has been garnished seemingly without your knowledge.
In some cases, you may discover that your bank account has been garnished seemingly without your knowledge. Though debt collectors are legally obligated to “notify” you if they are filing a case against you to seek garnishment, this notice may not always get to you or seem like a legitimate document. These companies often don’t have your current address, only your “last known,” but they do not need to prove that you have physically received the complaint in order to move forward with seizingyour wages or freezing your bank account.
If you don’t respond to these lawsuits (that you may not even know about) in 20 days, your creditor can be given clearance to freeze your bank account.
However, your creditors cannot take exempt funds from your account or paycheck in order to collect the funds that they are owed.
Government aid is perhaps the most well-known exemption. This includes unemployment wages, Social Security, medical insurance supplements (Medicare, MinnesotaCare, etc.), Energy Assistance and Veterans Benefits, among many others.
In addition to federally and state-provided assistance, things like child support payments, student loans, workers compensation and pension funds are also exempt. If you have less than two months’ worth of certain benefits in your account, these are automatically exempted. If you have more than that, this money can remain unusable until you file a petition with a court to have it released.
In terms of garnishing your wages, employers cannot take more than 25 percent of your income, no matter how much money you make. And, if you make less than the federal minimum wage, your entire paycheck is not eligible for garnishment. Similarly, if you receive or have received need-based aid within the last six months, your wages cannot be garnished.
Tomorrow Atlas will discuss what you can do to claim an exemption. If you’re struggling with debt, consider speaking to a Minneapolis bankruptcy attorney to determine what the best strategy is for you and your family.
Chapter 13 is essentially a payment plan that you organize through the court system. Think of it as a consolidation loan with teeth.
There are 2 things you must do after your case is filed: (1) attend the meeting of creditors (aka the 341 hearing); and (2) complete a debtor’s education course via phone within 75 days from the date your case was filed. The 341 hearing is sometimes referred to as the meeting of creditors because your creditors can attend the meeting and ask you questions about the information contained in your petition.