Avoiding Wage Garnishment
The bills pile up and often the inclination is to avoid paying or even opening them. While it is tempting to ignore these notices, and you may even buy yourself some time, eventually your creditors will catch up with you.
In Minnesota, creditors are allowed to take, or garnish, money from your paycheck or bank accounts to satisfy a debt. For wages, Minnesota statutes allow your wages to be garnished up to the lesser of:
- Twenty-five percent of the debtor's disposable earnings; or
- the amount by which the debtor's disposable earnings exceed 40 times the federal minimum hourly wages
There are also certain exemptions that apply to garnishment orders. If deposits in your account came from insurance proceeds, child support, pensions or annuities, forms of government assistance or certain other limited assets and deposits, those amounts cannot be garnished.
Act Early to Stop Garnishment
Though garnishment can take a significant portion of your check, there are ways you can stop it. Negotiating with a creditor is often a good first step. Lowering payments or interest rates can help you stay current on your bills.
When the bills become overwhelming, however, more proactive steps may be necessary to protect yourself. Chapter 7 bankruptcy can help eliminate unsecured debt, including credit card debt, and help you free up money to put toward other bills.
Bankruptcy can even be helpful after the garnishment begins. After a person files for bankruptcy, they are afforded the protection of an automatic stay. This stay prevents creditors from beginning or continuing collections activities, including garnishments.
Getting Help
The worst thing you can do if you begin to experience financial difficulties is wait to act. Contact an experienced bankruptcy attorney to discuss your options as soon as your problems start. Even if bankruptcy is not for you, a lawyer may be able to negotiate with your creditors and make sure your rights as a consumer are protected.