If you missed the deadline to fight a lawsuit against you and you do not have a viable defense, a default judgment will be entered against you. Once the judgment is entered against you, the creditor will be able to initiate a garnishment action by which they can attach to money in your bank account or wages.
The creditor will issue a garnishment summons on a third party such as your employer or bank, by which the third party will be required to withhold the funds from your wages or set aside funds out of your financial account.
A creditor cannot generally garnish more than 25% of your wage earnings or any at all if you make less than $290/week. If you have a levy on your bank account, you will need to fill out a form claiming 75% of the amount taken is exempt called a “Debtors Exemption Form” and providing documentation that the income in your account came from wages. If the garnishment is through your employer, they will generally calculate the 25% and set it aside for your creditor.
Additionally, if you received any of the following sources of government assistance in the past 6 months, you are considered to be 100% exempt from garnishment:
- Minnesota Family Investment Program
- Work First Program
- Medical Assistance
- General Assistance
- General Assistance Medical Care
- Emergency General Assistance
- Minnesota Supplemental Aid
- MSA Emergency Assistance
- Supplemental Security Income
- Energy Assistance and
- Emergency Assistance.
If you believe you are exempt from garnishment, you need to fill out the same “Debtors Exemption Form” indicating all your funds are protected, along with proof of the assistance received and the previous 60 days of bank statements. You cannot simply call the creditor’s attorney; you must respond to the garnishment summons in writing by claiming the exemption.
Garnishments are very serious and can cause serious financial hardship for anyone trying to deal with the involuntary repayment of your debt. Bankruptcy is another way to stop the garnishment and is often times an opportunity to recover some of the funds that were taken from you. If you wish to avoid further garnishments or levies, please set up your free consultation with one of our experienced bankruptcy attorneys.