What is Garnishment?
Garnishment is a legal process whereby a creditor collects an outstanding debt via a third party—known as a “garnishee.” The third party is ordinarily an employer, bank, or the government. For instance, if John Doe owes $1,000 in an overdue debt, the creditor entitled to the debt may seek to garnish John’s wages, bank account, government benefits, or other assets as a means of repayment.
In order for a creditor to take money from a debtor’s wages, bank account or government benefits they must ordinarily obtain a judgment. A “judgment” is a final decision by a court that a debtor owes a particular amount. There are, however, special circumstances under which a court might allow a creditor to garnish a debtor’s assets without a judgment.
When is Garnishment Authorized?
A garnishment is authorized in the following circumstances pursuant to Minnesota Statutes section 571.71:
- at the time a civil action is commenced but before judgment is entered where a special circumstance is present pursuant to section 571.93, subdiv. 1;
- where a debtor fails to respond to a lawsuit within 45 days; or,
- at any time after entry of a money judgment in a civil action.
Requirements for Garnishment
Where a debtor fails to respond to a lawsuit, garnishment becomes effective only after a creditor has served upon a debtor a Notice of Intent to Garnish form and an Exemption Notice pursuant to sections 571.72, subdiv. 10 and 11. The creditor must also serve the debtor with a copy of the affidavit of service for the original summons and complaint and a Garnishment Disclosure form pursuant to section 571.75.
Where a money judgment has been entered in a civil action, a creditor must first serve a Garnishment Summons upon the garnishee pursuant to section 571.72, subdiv. 2. An example of a Garnishment Summons can be found here. The summons must be served personally or by certified mail. A copy of the Garnishment Summons and all other papers served upon a garnishee must also be served upon the debtor within five (5) days of serving the garnishee. The copies must be served by mail.
Where Assets are Held in Bank Account:
Where a debtor’s funds to be garnished are held on deposit at a financial institution, the creditor must serve upon the institution a Notice of Garnishment, two (2) copies of an Exemption Notice form, as well as instructions for completion of the forms. These forms must be substantially the same as the examples set forth in section 571.912. Failure to send these notices will render the garnishment void. In addition, a creditor must mail to the debtor a Notice of Debtor, pursuant to section 571.74, as well as a copy of the Garnishment Summons and anything else that was served on the debtor’s bank, within five (5) days of service on the bank.
After the debtor has received the notice, instructions, and two (2) copies of the exemption notice, he/she has fourteen (14) days to claim an exemption. If the debtor fails to do so, the funds remain subject to garnishment. If the debtor does file an exemption, the creditor has the opportunity to object by serving a Notice of Objection and Notice of Hearing upon the debtor, and financial institution, within six (6) days of receipt of the exemption claim. The Notice of Objection and Notice of Hearing must be substantially the same as the example forms provided in section 571.914, subdiv. 2.
Where Garnishing Wages
Where a wage garnishment order is issued by a court or government agency, a creditor must first serve a Garnishment Summons upon the employer pursuant to section 571.72, subdiv. 2. An example of a Garnishment Summons can be found here. The summons must be served personally or by certified mail. A copy of the Garnishment Summons and all other papers served upon the employer must also be served upon the debtor within five (5) days of serving the employer. The copies must be served by mail.
There are, however, certain limitations on the amount which is subject to garnishment for a given pay period. Specifically, the amount subject to garnishment may not exceed the lesser of 25 percent of the debtor’s disposable earnings or forty (40) hours per week of federal minimum wages for the same pay period. If the judgment is for child support, the creditor is entitled to substantially more pursuant to section 571.922(b).
Fair Debt Collection Warning
In order to comply with the Fair Debt Collections Practices Act, a creditor 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.