On May 21st, 2024, Minnesota Governor Tim Walz signed into law the Debt Fairness Act. The Debt Fairness Act was authored by Senator Boldon and Representative Reyer in collaboration with Attorney General Ellison’s Office.
This act brings much needed relief to Minnesotans, especially working families, as they deal with the financial challenges they face on a daily basis.
The key provisions of the Act are as follows:
Medical Debt Reforms
- The key provisions of the Act are as follows:
- Ending the automatic transfer of medical debt to a patient’s spouse;
- Ending the automatic transfer of medical debt to a patient’s spouse;
- Banning medical providers from withholding medically necessary care due to unpaid debt;
- Banning medical providers from withholding medically necessary care due to unpaid debt;
- Allowing people who successfully defend medical debt lawsuits to have their attorney's fees paid;
- Allowing people who successfully defend medical debt lawsuits to have their attorney's fees paid;
- Creating a new process to help people dispute medical coding and billing errors;
Judgment Collection Reforms
- Establishing automatic income-based wage garnishment levels, ranging from 10% to 25%, rather than the flat 25% garnishment cap that previously existed;
- Establishing automatic income-based wage garnishment levels, ranging from 10% to 25%, rather than the flat 25% garnishment cap that previously existed;
- Extending Minnesota’s wage garnishment protections to everyone living and working in Minnesota;
Bankruptcy Reforms
- Making bankruptcy more affordable for families by allowing them to keep more of their necessities through the process, including:
- Doubling protection for vehicles from $5,000 to $10,000, with extra protection for persons with disabilities and for work vehicles;
- Doubling protection for vehicles from $5,000 to $10,000, with extra protection for persons with disabilities and for work vehicles;
- $3,000 for household tools like snowblowers and lawnmowers;
- $3,000 for household tools like snowblowers and lawnmowers;
- Money received in personal injury lawsuits;
- Money received in personal injury lawsuits;
- $1,500 additional protection for any property.
“Once the Debt Fairness Act passes the House and is signed into law, it will be easier for Minnesotans to work their way out of debt and harder for Minnesotans to be trapped in cycles of poverty and exploitation by debt,” said Attorney General Ellison. “Spouses will no longer be forced to pay off each other's medical debt in life or in death, people won’t be denied needed medical care because they are struggling with their hospital bills, working-class Minnesotans won’t face excessive wage garnishment, and the already difficult process of bankruptcy will become much more affordable. I am extremely grateful to Senator Boldon and Representative Reyer for their leadership on this legislation, and to the advocates who worked so hard to help turn these reforms into reality.”
“Today, we take an important step forward towards a healthcare system that truly puts people over profits,” said Senator Liz Boldon. “While there is still more work to do, the commonsense reforms contained in the Minnesota Debt Fairness Act will create a more level playing field for those trying to pay back their medical debt and have a meaningful impact for thousands of Minnesotans.”
"DFLers are taking action to address the medical debt crisis,” “Too many Minnesotans are saddled with unmanageable debt, and our current laws have been insufficient at addressing this crisis. These reforms will help unburden Minnesotans from medical debt and help them afford their lives," said Representative Liz Reyer.
- Ronald J. Lundquist, Bankruptcy Attorney, Eagan, Minnesota.
SOURCE: https://www.ag.state.mn.us/Office/Communications/2024/05/16_DebtFairnessAct.asp