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What Actually Is Wage Garnishment?


Wage garnishment is a legal process in which the state allows a creditor to take your wages or money out of your bank account without your permission for a debt that you owe to that creditor.

Are There Certain Parameters To Be Met For A Creditor To Begin Garnishment?

In order to start garnishing your wages, a creditor has to have started a lawsuit against you. Minnesota is one of the few states in the nation that allows what is called “Hip Pocket Service.” What that means is in order to start a lawsuit against you, all that person has to do is serve you with a copy of a summons and a complaint. They don’t have to file anything in court; they don’t have to set a court hearing or anything like that. All they have to do is serve you under the rules of civil procedure, which typically requires a service in person, but there are actually allowances for service by mail or service by publication, which means through a newspaper.

Once a person is served with a lawsuit, they have 20 days to answer that lawsuit in Minnesota. This requires presenting a defense to the allegations and claims of the complaint. If those 20 days pass and you have not answered the lawsuit by submitting a document to the plaintiff, then the plaintiff has grounds to obtain a default judgment against you. The default judgment is the court ruling in favor of the plaintiff by default because no defenses were claimed. Once the creditor/ plaintiff has a judgment against you, they then can exercise their right and begin garnishing your wages or money out of your bank account.

To begin that process, once the judgment is entered into court, they have to serve a notice of intent to garnish on your employer or your bank, and they also have to serve you with an exemption form. You have 10 days to claim an exemption to be garnished. If they do not get a response in 10 days of serving you the exemption form, then they can begin either garnishing your wages or pulling money out of your bank account.

How Is Garnishment Started?

Garnishment is started after a judgment with the notice of intent to garnish served on the employer. The employer by law has to comply with the garnishment statute and can take up to 25% of your net wages, unless the creditor receives an exemption form from you within 10 days of its being provided to you. It works a little bit differently if it’s a bank account instead of a wage garnishment. For the bank account, essentially, the bank gets the notice first, and the bank is required to freeze your account so no withdrawals can be made. Then within three days it has to release the funds to the creditor; however, you still get the exemption allowance, which means that the creditor will release the funds back to you. The element of surprise is paramount in a bank levy, which is another word for a bank garnishment. They freeze the account first before any exemption form is sent to you.

How Much Of A Person’s Wages Can Be Garnished? Is There A Cap?

In Minnesota 25% of your net wages can be garnished. That’s 25% after taxes, insurance deductions and anything else that may come out of your paycheck.

What Are The Collateral Consequences Associated With Wage Garnishment?

There are actually restrictions, both federal and state restrictions, on Minnesota employers who fire someone due to a wage garnishment. Under federal law you can’t be fired for having one garnishment, but the law is silent on if you have two or more garnishments going on. So technically, you could lose your job if you are undergoing more than one garnishment. Under Minnesota law, you cannot be fired if you have a garnishment regarding a consumer account, essentially, if you are being garnished for a debt. There are protections in effect, and most employers have payroll procedures to address the garnishment, whether it’s due to a judgment from an old debt, child support or the IRS.

If your bank account is being garnished, you actually can incur overdraft penalties. For example, if your bank account is frozen and your mortgage payment is pending from that account, the funds can be released to the creditor before the mortgage payment goes through. Then once the funds are released, if the bank honors the mortgage payment, it will overdraft your account, and the bank will charge you a fee for that. It’s a snowball effect. When somebody comes in and involuntarily takes a portion of your money, obviously, it interrupts your cash flow, and it can cause a lot of problems. Once a garnishment happens, you really need to focus on what you have to do to resolve the situation as soon as possible.

For more information on Wage Garnishment In Minnesota, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (763) 568-7343 today.

Read more about Respond To The Lawsuit Notice.
Read more about The Basic Procedures For Challenging A Wage Garnishment.
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Michael Sheridan, Esq.

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