Protection from Creditors

If you owe money and your creditors are attempting to collect from you, it is important to know about protections (exemptions) from garnishment.  Garnishment is a legal process used by creditors to take money from your paycheck or out of your bank account.

The good news is that some or all of your money may be protected from garnishment.

You are protected if you have received government aid, based on need, within the last six months.  Types of government aid include Medical Assistance, Minnesota Supplemental Aid, Food Assistance and Social Security Income.  (This is not a complete list.)

Debtors who earn less than the federal minimum wage at 40 hours a week are protected from wage garnishment.

Debtors who do not receive government benefits and earn more than minimum wage are protected as well.  Creditors may only garnish 25% of the income earned by these debtors.

The debtor (individual owing money) must claim these exemptions by notifying the creditor in writing.  A letter to the creditor should include proof of participation in a government aid program.  If these exemptions are not claimed the creditor has every right to attempt to collect from the debtor.  

Not all debts are protected from garnishment.  Entities that may garnish your wages or place a levy on your bank account even when you are protected, include but are not limited to, the Internal Revenue Service, Minnesota State, Student Loan Organizations, City Governments and the Child Support Magistrate.

Also, secured debts including car loans and mortgages do not fall within these exemptions.

Blog post provided by Stacey Keenan, an attorney in Woodbury, MN who practices in the are of consumer law.  www.keenanlegalmn.com

Contemplating Divorce? Here are some things to consider.

When you’re just considering divorce:  These are things you can do to be more prepared in case you choose to divorce at some point in the future.  While there are non-divorce related reasons for most of these actions—many married couples have checking and credit accounts in their own names and it’s good to have a detailed record of your valuables for insurance and estate planning purposes—they can still tip off a suspicious spouse that you are considering divorce.  You will need to weigh your need to feel prepared with the possibility that you may tip your hand before you’re ready.  It’s an individual decision that only you can make.

£  Checking Account.  Open a checking account in your name.  If your spouse is aware that you are considering divorce, try to agree with your spouse how you will split the cash in your joint accounts.  If you are still living together, you will need to determine how you will divide household expenses. 

o   If you are worried that your spouse will withdraw/spend all the money in your joint accounts, take half of the balance and put it in a separate account.  The intent is not to hide it or spend it all, but just to make sure it is available later. 

£  Credit Card.  Open a credit card in only your name.   If your spouse is aware that you are considering divorce or if you’re afraid your spouse will max out the cards out of spite, consider closing or freezing joint accounts and working to pay them off with your joint funds or transferring balances to cards that you each hold in your own names. 

£  Cash.  Set aside enough cash to cover two weeks’ worth of expenses.  The intent is not to hide this money, but to have enough to live on should your accounts be frozen.

£  Credit Report.  You should order a free credit report every six months or so to ensure that your spouse hasn’t applied for any more joint credit cards or loans.

£  Safe Deposit Box.  If you have a joint safe-deposit box, make a list of its contents and ask the bank to require both signatures to open the box.

£  PO Box.  Consider opening a PO Box in your name to ensure your spouse cannot access your mail.

£  List of Valuables.  Make a list of the valuable household belongings (jewelry, electronics, vehicles, antiques, other items worth more than $500) including a description, photograph, serial numbers, and copies of title and registration when appropriate. 

£  Passwords.  Change the passwords for your ATM, online bank accounts, email and any other online accounts that your spouse may be able to access.

Once your spouse is aware that you are seriously considering divorce or papers have been served.

£  Complete all the items under “Considering Divorce”

£  Freeze Joint Investments.  As soon as you begin divorce proceedings, freeze all joint investments accounts so that nothing can be withdrawn or loans taken out against them. 

£  Retirement Account.  If your spouse has a retirement account in his/her name, request a copy of the current account statement and documentation on how the plan works.

£  Car Insurance.  Switch your car insurance from a joint policy to a single policy to ensure your rates won’t go up as a result of your spouse’s accidents or tickets.  If you only have one car or if you’re not sure who will end up with each car, you may need to continue the joint insurance until ownership is determined by the court.

£  Life Insurance Beneficiary.  Change the beneficiary on your life insurance policy and any retirement accounts.

£  Powers of Attorney.  Cancel or destroy any powers of attorney that you may have executed which would give your spouse authority over your affairs.

£  Health Care Directive.  Amend your health care directive to remove your spouse or in-laws as agents who would be able to make your health care decisions should you become incapacitated.

£  Keys.  Ask your spouse to return his/her set of keys to your vehicle as well as any keys your spouse may have for your parent’s home or other relatives. 

£  Bills.  If you move out of the house, be sure to have your name removed from any household bills. 

£  Home Security.  Once your spouse has moved out of the home, change the locks, the password to the home security system, the code to the garage door, the code to the voicemail mailbox, the code to the home safe, and hide your spare keys in a different place.

A few things not to do:

£  Home Owners/Renters Insurance.  Even if you move out of the home, be sure to keep your name on any home owners or rental insurance policy to protect your share of the home and/or your belongings that are still in the home.

£  Will.  Do not change your will until after the divorce is final, but get a copy of your current will and start thinking about how you want to change your estate plan.  Make an appointment with an attorney soon after your divorce is final.

£  Utilities.  Do not turn off utilities if your spouse is still living in the house.

Amanda Swanberg of Swanberg Law Offices is a co-founder of SlidingFeeAttorneys.com.  Amanda practices in the areas of Family Law and Mediation and is happy to offer you a free consulatation.  Please call 612-670-9626.

Pulled over by the police… now what?

For a lot of people being pulled over is a stressful event.  This is the case even if the person doesn’t have anything to hide.  For others, being pulled over is a matter of routine and more of a hassle than anything else.  Below are a few pointers on how to handle yourself should you be asked for your license and registration:

1.     When you see the flashing lights or hear the siren behind you, pull over as quickly and safely as possible.  Always use your traffic signals. 

It is important to pull over as quickly as possible because if the officer thinks you are fleeing or avoiding the stop, you will be charged with a felony automatically when the officer catches up with you.  Minnesota law does not distinguish between fleeing for 5 blocks versus several miles - they are both felonies. 

2.     Keep your seatbelt on and buckled.  Make sure your hands are on the steering wheel as the officer approaches. 

This advice applies to any passengers in your vehicle as well.  Officers get very nervous if you are fidgeting or hiding your hands.  Recent violence against police officers has given them reason to be extra cautious when approaching your vehicle.  By keeping your hands visible you will put the officer more at ease, which will make the entire exchange more pleasant for both of you.  It is important to keep your seatbelt on simply to avoid getting a ticket for not wearing one.  The current cost of seatbelt violations is $130. 

3.     Always be polite.  Do not use profanity or rude gestures.

You can expect that if you have an attitude towards another person, especially an officer, they will have no reason to be respectful towards you and will not cut you a break.

4.     You are required to tell the officer your name and other identifying information. 

You DO NOT have to answer any other questions.  DO NOT offer information, let the officer speak first.  “Minnesota Nice” may compel you to want to answer when an officer asks you if you know why you were pulled over or if you have had anything to drink, fight the urge to answer.  If the officer is asking you if you know why you were pulled over, or how fast you were going, it is prudent to either say nothing, or to ask the officer to tell you why. 

5.     Do not exit your vehicle unless you are asked to do so.

This follows along the lines of fidgeting and hiding your hands.  If you make unexpected movements or try to approach the officer you will not be doing yourself any favors.  In addition to making the officer nervous or angry, you may be charged with obstructing the legal process for not listening to the directions and interfering with the officer’s ability to clear the traffic stop.  Of course, the validity of any potential charges or tickets would need to be evaluated by a lawyer or a court. 

If you are asked to exit your vehicle, comply with the request, but make sure to close your car door behind you after you exit.

6.     You do not have to consent to a search of your vehicle. 

During a routine traffic stop there is no reason for an officer to need to look in your trunk.  If you are asked if the officer can search your car – you DO NOT have to allow them.  If the officer has a valid reason, they will obtain a warrant to search the car. 

*Information in this blog is not intended to be used in place of legal advice specific to your case from an attorney.  Contact Jennifer Congdon today to discuss your case.  651-705-6311*  http://www.congdon-law.com/