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