If you have a judgment you are trying to collect, and the debtor has funds at a bank or other financial institution, you may garnish the debtor’s account.
Obtaining the judgment and finding out where the debtor has assets is probably the most difficult and expensive part of debt collection.
In order to garnish a bank account of a debtor, there are several notices and other forms you need to serve on both the debtor and the bank.
The Garnishment Summons and Disclosure Form
First, you need to serve a Garnishment Summons and Disclosure Form upon the financial institution along with an Important Notice, Instructions, and two copies of an Exemption Form.
The requirements for the Garnishment Summons are set forth in Minnesota Statute 571.74. This statute contains an example form you may copy if you wish. This statute is online at https://www.revisor.mn.gov/statutes/?id=571.74.
Minnesota Statute 571.75 contains an example form for the Disclosure Form you may copy if you wish. This statute is online at https://www.revisor.mn.gov/statutes/?id=571.75.
Minnesota Statute 571.912 contains example forms for the Important Notice, Instructions and Exemption Form you may copy if you wish. This statute is online at https://www.revisor.mn.gov/statutes/?id=571.912#stat.571.912.
The Bank’s Retention
The bank must retain as much of the amount the debtor owes to you as the bank holds for the debtor, but not more than 110% of your claim.
Fair Debt Collection Warning
The Fair Debt Collection Practices Act prohibits unethical tactical events creditors in the past have been known to use to collect debts. As a creditor you should add the language, “This is an attempt to collect a debt. Any information obtained will be used for that purpose,” pursuant to the Fair Debt Collection Practices Act requirements under section 332.37(12) to any documents you serve in order to collect a debt.
Notice to the Debtor
You must mail to the debtor a copy of the Garnishment Summons and anything else that you served on the debtor’s bank, within 5 days of service on the bank.
You must also serve the debtor with a Notice to Debtor. The required font size for the Notice to Debtor is at least a 14-point font. Minnesota Statute 571.74 contains an example from you may copy if you wish. This statute is online at https://www.revisor.mn.gov/statutes/?id=571.74.
The debtor has 14 days to notify the financial institution and the creditor (you) of any claim for exempt property he or she wishes to assert. If the financial institution does not receive any such notification within 14 days, the debtor’s funds at the financial institution remain subject to garnishment. To obtain these funds, execute by direct levy using a Writ of Execution pursuant to Minnesota Statutes chapter 550.
