Sarah Edwards | April 14, 2023
Summary: Wage garnishment can take a serious bite out of your wallet. Luckily, MN Stat § 571.922 prevents wage garnishment of more than 25% of a debtor’s disposable earnings in Minnesota. Other state laws protect debtors from excessive wage garnishment. You can avoid wage garnishment altogether by responding to your lawsuit with SoloSuit.
Receiving notification of impending wage garnishment isn’t just bad news—it’s awful. Despite your objections, a creditor, ex-spouse, tax authority, or other entity will receive a portion of your paycheck until you repay your debt.
Wage garnishment can severely hinder your ability to pay your other obligations, like rent and car payments. If you struggled to make ends meet before, wage garnishment will worsen the situation.
To obtain a wage garnishment against you, a creditor or other entity usually needs a judge’s consent. That occurs when they successfully sue you for debt.
For instance, if your creditor decides to file a debt lawsuit against you because you haven’t paid your bills, and if you don’t file an Answer or attempt to defend yourself, they’ll probably win their case. The judge will order a default judgment, which they can use to garnish your wages.
Prevent potential wage garnishment by fighting your debt lawsuit. SoloSuit’s Debt Answer service can help.
Occasionally, entities can garnish your wages without a judge’s approval. If you owe back taxes to the IRS or your state tax agency, they can start the wage garnishment process against you. Similarly, federal student loan providers and ex-spouses to whom you owe child support can also garnish your wages.
Each state has its own legal requirements for wage garnishment. Minnesota is no different.
Let’s start with the limitations on wage garnishment. According to MN Stat § 571.922, most wage garnishments (except for child support) will be the lesser of the following:
According to Minnesota law, disposable earnings include any earnings after deducting required legal withholdings, such as federal and state tax. If you earn less than $290 weekly, creditors cannot garnish your wages.
Let’s look at an example.
Example: Julie is facing a wage garnishment from an old creditor. The creditor obtained a judgment for $1,500 against Julie. Her paycheck is $600 after taxes each week. According to Minnesota law, her creditor can garnish her paycheck for $150 weekly (25% of her disposable income) until she repays her debt — this is the lesser of the two options given under MN Stat § 571.922. If the employer were to garnish her wages for the amount her pay exceeds the Minnesota minimum wage, the garnishment would be $600 minus (40 x $10.59 per hour), or $176.40. Minnesota requires the garnishment to be the lesser of the two alternatives.
People who face wage garnishment for back child support are subject to different rules. Garnishment varies from 50 to 65% of the debtor’s disposable income, depending on the age of the debt and whether the debtor has a new spouse or dependent child.
It is possible to exempt part of your income from wage garnishment if you receive financial or other assistance from government programs. However, you must fill out an exemption form — an exemption is not automatic. People may obtain an exemption if they receive assistance under these programs:
General rules in Minnesota stipulate that creditors cannot garnish your wages for two months following the period when you last received government assistance. However, if you fail to file the appropriate forms, you’ll give up your right to an exemption.
Every debtor facing a wage garnishment receives a Notice of Intent to Garnish Earnings. Each Notice contains another paper, the Debtor’s Exemption Claim Notice. You must fill out the Debtor’s Exemption Claim form and provide supporting paperwork, such as your bank statements.
You have up to ten days to return the Debtor’s Exemption Claim form to your creditor. If you don’t file the claim promptly, the garnishment will begin and can continue for up to 70 days.
If you file a legitimate exemption form within the allotted time and your creditor starts garnishing your wages anyway, you must petition your local Minnesota court. Hire a lawyer experienced in wage garnishment to prove your eligibility for the exemption.
If the court finds that the creditor engaged in bad faith garnishment of your wages, the creditor will be responsible for your legal costs, damages, and a maximum $100 fine.
As you can see, wage garnishment can severely damage your after-tax income. You may find it challenging to keep up with your other responsibilities, and this will only worsen your financial problems.
To avoid wage garnishment, it’s best to work with your creditor to come to a solution before your court date. Find the means to pay off the debt before it becomes a serious issue. If you can’t find the money to repay the obligation, attempt to settle it.
Often, creditors are willing to settle old debts because they know that the administrative burden of wage garnishment can outweigh the benefits. Rather than dealing with your employer and court paperwork, they’d rather accept a one-time settlement payment that’s less than the total value of your obligation.
Settling your debt may sound difficult since you’ll need to come up with the money you may not have in savings, but it’s much better than dealing with ongoing wage garnishment. Explore all your options before allowing a creditor to garnish your wages.
Are you facing a debt lawsuit? Settle your debt with the help of SoloSettle.
Watch the following video to learn more about how to settle a debt and avoid wage garnishment in Minnesota:
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