Minnesota Wage Garnishment | MN Exemptions | Maximum Threshold | Writ of Garnishment

Creditors who are not paid on their legally recognized and enforceable debts have several options to compel payment. One of the best known is wage garnishment, which is when a creditor with a favorable judgment (a court determination that another party owes the creditor money) obtains an order requiring money belonging to the debtor to be turned over for creditor’s benefit. In garnishment, the income that is being diverted to the creditor is not in the debtor’s possession; it is money that is in the control or possession of a third party, called a garnishee. In wage garnishment, the garnishee is the debtor’s employer, and the money is the debtor’s wages or salary.

It’s important to bear in mind that any income or money in a third party’s control or possession can be garnished, not “just” salaries or wages from working. For example, unless it’s been made exempt (see below), income from pension plans could be garnished

Also bear in mind that garnishment is available for any debt, including those resulting from: sale of goods, credit cards, contracts, lawsuits, taxes, and promissory notes.

Minnesota Garnishment Exemptions and Non-Exemptions

While in theory any and all money belonging or owed to a debtor, which is in the control or possession of a third party, can be garnished, in practice, many types of income are exempted (or protected) at least in part from garnishment.

Social Security: federal law protects Social Security from garnishment except for certain federal taxes and child support or alimony.

Pensions and retirement benefits: Minnesota provides some of the broadest protection to pensions and other retirement savings and benefits Not only are public employee pensions protected from garnishment, but retirement benefits generally, including IRAs, enjoy broad exemptions from garnishment. (Note that there some limits on the amount of non-public-employee retirement benefits that are exempt; currently, it’s equal to a present value of $30,000 plus—after that—amounts actually necessary for support; it is therefore not an open-ended exemption.)
Most kinds of public benefits or assistance are protected in Minnesota, such as: workers’ compensation; unemployment benefits; aid to families with dependent children; veterans’ benefits; supplemental security income (SSI); crime victim’s compensation; and general or supplemental assistance.
Minnesota also protects several kinds of insurance and annuities: fraternal society benefits; life insurance proceeds, if the beneficiary(ies) are the insured’s spouse or child, up to a certain amount ($20,000 + $5,000/dependent); disability and accident benefits; police, fire, or beneficiary association benefits.

Minnesota Maximum Threshold

Even for non-exempt income, not all of it can be garnished. Minnesota is slightly more generous to low-income debtors than federal law in determining how much of non-exempt income may be garnished. Under Minnesota law, the lesser of the following may be garnished:

25% of disposable income (same as federal)—for most debts; certain debts, such child support and taxes, will allow higher levels of garnishment
The amount by which a debtor’s weekly income exceeds 40 times the minimum wage (federal law only protects up to 30 times)

Disposable income for purposes of determining garnishment is income left after legally required deductions payroll deductions, such as from FICA. The list of legally required deductions is small, and generally amounts less than 10% of an employee’s paycheck. As a rough rule of thumb, for most people, 25% of at least 90% of their income could be garnished.

Minnesota Statute of Limitations

Before seeking garnishment, the creditor needs to establish its legal right to the money. Creditors other than tax authorities (such as the IRS) do this by suing the debtor, winning, and obtaining a court judgment directing the payment of money. This means the creditor must bring a legal action with the statute of limitations, or time allowed for suing, for the debt or cause of action. In Minnesota, common consumer statutes of limitation, are:

Open accounts (credit cards): 6 years
Written contracts: 6 years

The next step is to seek garnishment, if the debtor does not satisfy (or pay) the judgment. In Minnesota, creditor has up to 10 years to seek garnishment or otherwise enforce the action. That allows the creditor to wait and see whether down-on-his-or-her-luck debtor starts earning more before garnishing.

Writ of Garnishment in Minnesota

The creditor has already obtained its judgment; the writ or order of garnishment simply enforces it. Garnishment is primarily between the creditor, the court, and the garnishee (the third party holding debtor’s money). The creditor asks the court for an order directing garnishment; in doing so, it does not need to re-establish or –prove its right to the money, but instead relies on the judgment and—

Informs that court that it has not been paid and believes garnishment is necessary to secure payment
Informs the court of one (or more) garnishees whom it believes has money of debtor’s than can used for the judgment

Papers will be served on the garnishee(s) in order to validate that the garnishee has non-exempt money belonging or owed to the debtor. Assuming that it does, the garnishee will be ordered to direct part of that money to creditor’s benefit. More on Stopping Wage Garnishment in Minnesota.

Getting Legal Help

A debtor does not simply have to accept garnishment. With an attorney’s help, there are ways to challenge it, such as:

Challenge the underlying judgment—it’s too late to re-argue the prior case, but if the judgment was awarded in violation of a procedural rule, it may be possible to set it aside
Challenge the garnishment on procedural grounds—for example, if the garnishment is too late (statute of limitations) or the garnishment process was not done correctly
Challenge the garnishment due to errors—does it name the wrong the wrong debtor? or not have the amount of the debt correct? (For example, does it not take into account payments the debtor previously made on the debt?)
Challenge the amount garnished—show that more of the debtor’s income is from exempt sources, which leaves less available as disposable income to garnish

Need Debt Help?