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H.F. No. 334, 1st Engrossment - 86th Legislative Session (2009-2010) Posted on Feb 16, 2009 1.1A bill for an act 1.2relating to creditor remedies; modifying garnishment instructions, forms, 1.3procedures, and exemptions;amending Minnesota Statutes 2008, sections 1.4550.143; 550.37, subdivision 14; 551.05; 571.71; 571.72, by adding a 1.5subdivision; 571.913; 571.914; 571.925. 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7 Section 1. Minnesota Statutes 2008, section 550.143, is amended to read: 1.8550.143 LEVY ON FUNDS AT A FINANCIAL INSTITUTION. 1.9 Subdivision 1. Procedure. When the sheriff is levying upon funds at a financial 1.10institution, this section must be complied with, in addition to the general provisions set 1.11forth in section 1.12 Subd. 2. Disclosure form. Along with the writ of execution and the exemption 1.13notice described in subdivision 3, the sheriff shall serve upon the financial institution an 1.14execution disclosure form which must be substantially in the following form:
1.23due and owing the judgment debtor from the third party the following: 1.24(1) Money. Enter on the line below any amounts due and owing the judgment debtor, 1.25except earnings, from the third party. ..... 2.1 2.2(2) Setoff. Enter on the line below the amount of any setoff, defense, lien, or claim 2.3which the third party claims against the amount set forth on line (1). State the facts by 2.4which such setoff, defense, lien, or claim is claimed. (Any indebtedness to a third party 2.5incurred by the judgment debtor within ten days prior to the receipt of the first execution 2.6levy on a debt is void as to the judgment creditor.) ..... 2.7 2.8(3) Exemption. Enter on the line below any amounts or property claimed by the 2.9judgment debtor to be exempt from execution. ..... 2.10 2.11(4) Adverse Interest. Enter on the line below any amounts claimed by other persons 2.12by reason of ownership or interest in the judgment debtor's property. ..... 2.13 2.14(5) Enter on the line below the total of lines (2), (3), and (4). ..... 2.15 2.16(6) Enter on the line below the difference obtained (never less than zero) when line 2.17(5) is subtracted from the amount on line (1). ..... 2.18 2.19(7) Enter on the line below 110 percent of the amount of the judgment creditor's 2.20claim which remains unpaid. ..... 2.21 2.22(8) Enter on the line below the lesser of line (6) and line (7). You are hereby 2.23instructed to remit this amount only if it is $10 or more. ..... 2.24 2.25AFFIRMATION 2.26I, ....................... (person signing Affirmation), am the third party or I am authorized 2.27by the third party to complete this nonearnings disclosure, and have done so truthfully 2.28and to the best of my knowledge.
3.2natural person and if the funds to be levied are held on deposit at any financial institution, 3.3the judgment creditor or its attorney shall provide the sheriff with two copies of an 3.4exemption notice, which must be substantially in the form set forth below. The sheriff 3.5shall serve both copies of the exemption notice on the financial institution, along with the 3.6writ of execution. Failure of the sheriff to serve the exemption notices renders the levy 3.7void, and the financial institution shall take no action. However, if this subdivision is 3.8being used to execute on funds that have previously been garnished in compliance with 3.9section 3.10In that event, the execution levy shall only be effective as to the funds that were subject 3.11to the prior garnishment. Upon receipt of the writ of execution and exemption notices, 3.12the financial institution shall retain as much of the amount due under section 3.13the financial institution has on deposit owing to the judgment debtor, but not more than 3.14110 percent of the amount remaining due on the judgment.
3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 3.37 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 4.36 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18
5.26 5.27 5.28
5.31 5.32 5.33
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8
6.23IMPORTANT NOTICE
6.24YOUR FUNDS HAVE BEEN LEVIED 6.25The Creditor has frozen money in your account at your financial institution. The 6.26account is frozen for 14 days from the date of this notice. 6.27Some of your money in your account may be protected (the legal word is 6.28exempt). You may be able to get it sooner than 14 days if you act quickly and follow 6.29the instructions on the next page. 6.30The attached form lists some different sources of money in your account that are 6.31protected. If your money is from one or more of these sources, check the box on the 6.32form next to the sources of your money. If it is from one of these sources, the Creditor 6.33cannot take it. 6.34BUT, you must follow the instructions and return the exemption form and 6.35copies of your bank statements from the last 60 days to have the bank unfreeze your 6.36money. If you do not follow the instructions or your creditor gets an order from the court 6.37or writ of execution, your financial institution will give the money to the Creditor. If that 7.1happens and it is protected, you can still get it back from the creditor later, but that is not 7.2as easy to do as filling in the form now. 7.3See next pages for instructions and the exemption form. 7.4 Subd. 3a. Form of instructions. The instructions must be substantially in the 7.5following form: 7.6INSTRUCTIONS 7.7Note: The creditor is who you owe the money to. You are the debtor.7.81. Fill out the attached exemption form in this packet. 7.9If you check one of the boxes, you should also give proof that shows that some 7.10or all of the money in your account is from one or more of the protected sources. 7.11Creditors may ask for a hearing if they question your exemptions. To avoid a hearing: 7.12Case numbers should be added to the form. Copies of documents should be 7.13sent with the form. 7.14NOTICE: You must send copies of your bank statements for the past 60 days 7.15before the garnishment. If you do not send bank statements with your exemption 7.16claim, the financial institution may release your money to the creditor. 7.172. Sign the exemption form. Make three copies. Keep one for yourself. 7.183. Mail or deliver the other copies of the form by (insert date). 7.19BOTH COPIES MUST BE MAILED OR DELIVERED THE SAME DAY. 7.20One copy of the form goes to:
7.30HOW THE PROCESS WORKS 7.31If You Do Not Send in the Exemption Form and Bank Statements:7.3214 days after the date of this letter some or all of your money may be turned over to 7.33the creditor or to the sheriff pursuant to Minnesota statute. 7.34If You Send in the Exemption Form and Bank Statements: 7.35Any money that is NOT protected can be turned over to the creditor or the sheriff. 7.36If the Creditor Does Not Object: 8.1The financial institution will unfreeze your money six business days after the 8.2institution gets your completed form. 8.3If the Creditor Objects: 8.4The money you have said is protected on the form will be held by the bank. The 8.5creditor has six business days to object (disagree) and ask the court to hold a hearing. You 8.6will receive a Notice of Objection and a Notice of Hearing. 8.7The financial institution will hold the money until a court decides whether your 8.8money is protected or not. 8.9You may want to talk to a lawyer for advice about this process. If you are low 8.10income you can call Legal Aid. 8.11PENALTIES: 8.12If you claim that your money is protected and a court decides you made that claim 8.13in bad faith, the court can order you to pay costs, actual damages, attorney fees, and an 8.14additional amount of up to $100. For example, it may be bad faith if you claim you receive 8.15government benefits that you do not receive. 8.16If the creditor made a bad faith objection to your claim that your money is protected, 8.17the court can order them to pay costs, actual damages, attorney fees, and an additional 8.18amount of up to $100. 8.19 Subd. 3b. Format of exemption form. The exemption form must be substantially 8.20in the following format: 8.21EXEMPTION FORM
9.39about my benefits to the above-named creditor, or its attorney. The information will ONLY 9.40concern whether I get benefits or not, or whether I have gotten them in the past six months. 9.41If I was an inmate in the last six months, I give my permission to the correctional 9.42institution to tell the above-named creditor that I was an inmate there. 9.43YOU MUST SIGN AND SEND THIS FORM BACK TO THE CREDITOR'S 9.44ATTORNEY AND THE BANK. FILL IN THE BLANKS BELOW AND GO BACK 9.45TO THE INSTRUCTIONS TO MAKE SURE YOU DO IT CORRECTLY. 10.1I have mailed or delivered a copy of this form to:
10.7address listed in the instructions.
10.15the writ of execution and exemption notices, the financial institution shall serve upon 10.16the judgment debtor two copies of the exemption notice. The financial institution shall 10.17serve the notice by first class mail to the last known address of the judgment debtor. If 10.18no claim of exemption is received by the financial institution within 14 days after the 10.19exemption notices are mailed to the judgment debtor, the funds remain subject to the 10.20execution levy and shall be remitted to the sheriff within 10.21judgment debtor elects to claim an exemption, the judgment debtor shall complete the 10.22exemption notice, sign it under penalty of perjury, and deliver one copy to the financial 10.23institution and one copy to the attorney for the judgment creditor within 14 days of the 10.24date postmarked on the correspondence mailed to the debtor containing the exemption 10.25notices. The judgment debtor is also required to include copies of bank statements for 10.26the prior 60 days with the exemption notice. In the event that there is no attorney for the 10.27judgment creditor, then the notice must be sent directly to the judgment creditor. Failure 10.28of the judgment debtor to deliver the executed exemption notice or copies of the required 10.29bank statements for the prior 60 days does not constitute a waiver of any claimed right 10.30to an exemption. Upon timely receipt of a claim of exemption, funds not claimed to be 10.31exempt by the debtor remain subject to the execution levy. All money claimed to be 10.32exempt shall be released to the judgment debtor upon the expiration of 10.33days after the date postmarked on the envelope containing the executed exemption 10.34notice mailed to the financial institution, or the date of personal delivery of the executed 10.35exemption notice to the financial institution, unless within that time the judgment creditor 10.36interposes an objection to the exemption. 11.1 Subd. 5. Objection 11.2shall be interposed, within six business days of receipt by the creditor of an exemption 11.3claim from the debtor, by mailing or delivering one copy of the 11.4Objection and Notice of Hearing to the financial institution and one copy of the 11.5 11.6 11.7 11.8may rely on the date of mailing or delivery of a notice to it in computing any time periods 11.9in this section. The 11.10substantially in the form specified in subdivision 7. 11.11The court administrator may charge a fee of $1 for the filing of a Notice of Objection 11.12and Notice of Hearing. Upon the filing of a Notice of Objection and Notice of Hearing, 11.13the court administrator shall schedule the matter for hearing no sooner than five business 11.14days but no later than seven business days from the date of filing. A debtor may request 11.15continuance of the hearing by notifying the creditor and the court. The court shall schedule 11.16the continued hearing within seven days of the original hearing date. 11.17An order stating whether the debtor's funds are exempt shall be issued by the court 11.18within three days of the date of the hearing. 11.19 Subd. 6. Duties of financial institution if objection is made to exemption claim. 11.20Upon receipt of a 11.21the 11.22financial institution shall retain the funds claimed to be exempt. 11.23 11.24 11.25 11.26 11.27 11.28 11.29funds claimed to be exempt until otherwise ordered by the court, upon mutual agreement 11.30of the parties, or until the garnishment lapses pursuant to section 571.79. 11.31 Subd. 7. Form of Notice of Objection and Notice of Hearing. (a) The 11.32 11.33Hearing must be in substantially the following form:
12.5 12.6 ..... ..... 12.7 ..... 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32
13.30order for attachment (strike inapplicable language) for the following reason(s):
13.35relevant to the exemption claim. Failure to do so could delay the court's decision.) 13.36If the creditor receives all documents and materials relevant to the exemption claim 13.37before the hearing date, the creditor may agree with your exemption claim and you can 13.38avoid a hearing. 13.39Because a court hearing will be held on your claim that your funds are protected, 13.40your financial institution will retain the funds until it receives an order from the court. 13.41 13.42
14.8 14.9 14.10 ..... 14.11 ..... 14.12
14.23 14.24 14.25 Subd. 9. Release of funds. At any time during the procedure specified in this 14.26section, the judgment debtor or the judgment creditor may, by a writing dated after the 14.27service of the execution, direct the sheriff to release the funds in question to the other 14.28party. Upon receipt of a release, the sheriff shall release the funds as directed. 14.29 Subd. 10. Subsequent proceedings; bad faith claims. If in subsequent proceedings 14.30brought by the judgment debtor or the judgment creditor, the claim of exemption is 14.31not upheld, and the court finds that it was asserted in bad faith, the judgment creditor 14.32shall be awarded actual damages, costs, and reasonable attorney fees resulting from the 14.33additional proceedings, and an amount not to exceed $100. It is not considered bad faith 14.34for a judgment creditor to object to an improperly completed or incomplete exemption 14.35claim. If the claim of exemption is upheld, and the court finds that the judgment creditor 14.36disregarded the claim of exemption in bad faith, the judgment debtor shall be awarded 14.37costs, reasonable attorney fees, actual damages, and an amount not to exceed $100. The 15.1underlying judgment must be modified to reflect assessment of damages, costs, and 15.2attorney fees. However, if the party in whose favor a penalty assessment is made is not 15.3actually indebted to the party's attorney for fees, the attorney's fee award shall be made 15.4directly to the attorney and, if not paid, an appropriate judgment in favor of the attorney 15.5shall be entered. Upon motion of any party in interest, on notice, the court shall determine 15.6the validity of any claim of exemption, and may make any order necessary to protect the 15.7rights of those interested. No financial institution is liable for damages for complying with 15.8this section. Both copies of an exemption claim or an objection to an exemption claim 15.9must be mailed or delivered on the same date. The financial institution may rely on the 15.10date of mailing or delivery of a notice to it in computing any time periods in this section. 15.11 Sec. 2. Minnesota Statutes 2008, section 550.37, subdivision 14, is amended to read: 15.12 Subd. 14. Public assistance. All 15.13and the earnings or salary of a person who is a recipient of 15.14based on need, shall be exempt from all claims of creditors including any contractual 15.15setoff or security interest asserted by a financial institution. For the purposes of this 15.16chapter, 15.17 15.18 15.19investment program, general assistance medical care, Supplemental Security Income, 15.20medical assistance, MinnesotaCare, payment of Medicare part B premiums or receipt of 15.21part D extra help, diversionary work program, work participation cash benefit, Minnesota 15.22supplemental assistance, emergency Minnesota supplemental assistance, and general 15.23assistance, emergency general assistance, emergency assistance or county crisis funds, 15.24fuel assistance, and food support. The salary or earnings of any debtor who is or has been 15.25an eligible recipient of 15.26correctional institution shall, upon the debtor's return to private employment or farming 15.27after having been an eligible recipient of 15.28inmate of a correctional institution, be exempt from attachment, garnishment, or levy of 15.29execution for a period of six months after the debtor's return to employment or farming 15.30and after all public assistance for which eligibility existed has been terminated. The 15.31exemption provisions contained in this subdivision also apply for 60 days after deposit 15.32in any financial institution, whether in a single or joint account. In tracing the funds, the 15.33first-in first-out method of accounting shall be used. The burden of establishing that funds 15.34are exempt rests upon the debtor. Agencies distributing 15.35the correctional institutions shall, at the request of creditors, inform them whether or not 16.1any debtor has been an eligible recipient of 16.2an inmate of a correctional institution, within the preceding six months. 16.3 Sec. 3. Minnesota Statutes 2008, section 551.05, is amended to read: 16.4551.05 ATTORNEY'S SUMMARY EXECUTION UPON FUNDS AT A 16.5FINANCIAL INSTITUTION. 16.6 Subdivision 1. Procedure. When levying upon funds at a financial institution, 16.7this section must be complied with, in addition to the general provisions specified in 16.8section 16.9 Subd. 1a. Exemption notice. If the writ of execution is being used by the attorney 16.10to levy funds of a judgment debtor who is a natural person and if the funds to be levied are 16.11held on deposit at any financial institution, the attorney for the judgment creditor shall 16.12serve with the writ of execution two copies of an exemption notice. The notice must be 16.13substantially in the form set forth below. Failure of the attorney for the judgment creditor 16.14to send the exemption notice renders the execution levy void, and the financial institution 16.15shall take no action. However, if this subdivision is being used to execute on funds that 16.16have previously been garnished in compliance with section 16.17judgment creditor is not required to serve an additional exemption notice. In that event, 16.18the execution levy shall only be effective as to the funds that were subject to the prior 16.19garnishment. Upon receipt of the writ of execution and exemption notices, the financial 16.20institution shall retain as much of the amount due under section 16.21institution has on deposit owing to the judgment debtor, but not more than 100 percent of 16.22the amount remaining due on the judgment, or $10,000, whichever is less. 16.23The notice informing a judgment debtor that an execution levy has been used 16.24to attach funds of the judgment debtor to satisfy a claim must be substantially in the 16.25following form:
16.33 16.34 16.35 16.36 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 17.10 17.11 17.12 17.13 17.14 17.15 17.16 17.17 17.18 17.19 17.20 17.21 17.22 17.23 17.24 17.25 17.26 17.27 17.28 17.29 17.30 17.31 17.32 17.33 17.34 17.35 17.36 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 18.12 18.13 18.14 18.15 18.16 18.17 18.18 18.19 18.20 18.21 18.22 18.23 18.24 18.25 18.26 18.27 18.28
18.36 18.37 19.1
19.4 19.5 19.6 ..... 19.7 ..... 19.8 ..... 19.9 19.10 19.11 19.12 19.13 19.14 19.15 19.16 19.17 19.18
19.33IMPORTANT NOTICE
19.34YOUR FUNDS HAVE BEEN LEVIED 19.35The Creditor has frozen money in your account at your financial institution. The 19.36account is frozen for 14 days from the date of this notice. 20.1Some of your money in your account may be protected (the legal word is 20.2exempt). You may be able to get it sooner than 14 days if you act quickly and follow 20.3the instructions on the next page. 20.4The attached form lists some different sources of money in your account that are 20.5protected. If your money is from one or more of these sources, check the box on the 20.6form next to the sources of your money. If it is from one of these sources, the Creditor 20.7cannot take it. 20.8BUT, you must follow the instructions and return the exemption form and 20.9copies of your bank statements from the last 60 days to have the bank unfreeze your 20.10money. If you do not follow the instructions or your creditor gets an order from the court 20.11or writ of execution, your financial institution will give the money to the Creditor. If that 20.12happens and it is protected, you can still get it back from the creditor later, but that is not 20.13as easy to do as filling in the form now. 20.14See next pages for instructions and the exemption form. 20.15 Subd. 1a. Form of instructions. The instructions must be substantially in the 20.16following form: 20.17INSTRUCTIONS 20.18Note: The creditor is who you owe the money to. You are the debtor.20.191. Fill out the attached exemption form in this packet. 20.20If you check one of the boxes, you should also give proof that shows that some 20.21or all of the money in your account is from one or more of the protected sources. 20.22Creditors may ask for a hearing if they question your exemptions. To avoid a hearing: 20.23Case numbers should be added to the form. Copies of documents should be 20.24sent with the form. 20.25NOTICE: You must send copies of your bank statements for the past 60 days 20.26before the garnishment. If you do not send bank statements with your exemption 20.27claim, the financial institution may release your money to the creditor. 20.282. Sign the exemption form. Make three copies. Keep one for yourself. 20.293. Mail or deliver the other copies of the form by (insert date). 20.30BOTH COPIES MUST BE MAILED OR DELIVERED THE SAME DAY. 20.31One copy of the form goes to:
21.5HOW THE PROCESS WORKS 21.6If You Do Not Send in the Exemption Form and Bank Statements:21.714 days after the date of this letter some or all of your money may be turned over to 21.8the creditor or to the sheriff pursuant to Minnesota statute. 21.9If You Send in the Exemption Form and Bank Statements: 21.10Any money that is NOT protected can be turned over to the creditor or the sheriff. 21.11If the Creditor Does Not Object: 21.12The financial institution will unfreeze your money six business days after they 21.13get your completed form. 21.14If the Creditor Objects: 21.15The money you have said is protected on the form will be held by the bank. The 21.16creditor has six business days to object (disagree) and ask the court to hold a hearing. You 21.17will receive a Notice of Objection and a Notice of Hearing. 21.18The financial institution will hold the money until a court decides whether your 21.19money is protected or not. 21.20You may want to talk to a lawyer for advice about this process. If you are low 21.21income you can call Legal Aid. 21.22PENALTIES: 21.23If you claim that your money is protected and a court decides you made that claim 21.24in bad faith, the court can order you to pay costs, actual damages, attorney fees, and an 21.25additional amount of up to $100. For example, it may be bad faith if you claim you receive 21.26government benefits that you do not receive. 21.27If the creditor made a bad faith objection to your claim that your money is protected, 21.28the court can order them to pay costs, actual damages, attorney fees, and an additional 21.29amount of up to $100. 21.30 Subd. 1b. Format of exemption form. The exemption form must be substantially 21.31in the following format: 21.32EXEMPTION FORM
23.7about my benefits to the above-named creditor, or its attorney. The information will ONLY 23.8concern whether I get benefits or not, or whether I have gotten them in the past six months. 23.9If I was an inmate in the last six months, I give my permission to the correctional 23.10institution to tell the above-named creditor that I was an inmate there. 23.11YOU MUST SIGN AND SEND THIS FORM BACK TO THE CREDITOR'S 23.12ATTORNEY AND THE BANK. FILL IN THE BLANKS BELOW AND GO BACK 23.13TO THE INSTRUCTIONS TO MAKE SURE YOU DO IT CORRECTLY. 23.14I have mailed or delivered a copy of this form to:
23.20address listed in the instructions.
23.28the execution levy and exemption notices, the financial institution shall serve upon the 23.29judgment debtor two copies of the exemption notice. The financial institution shall serve 23.30the notice by first class mail to the last known address of the judgment debtor. If no claim 23.31of exemption is received by the financial institution within 14 days after the exemption 23.32notices are mailed to the judgment debtor, the funds remain subject to the execution levy 23.33and shall be remitted to the judgment creditor's attorney within 23.34the judgment debtor elects to claim an exemption, the judgment debtor shall complete the 23.35exemption notice, sign it under penalty of perjury, and deliver one copy to the financial 23.36institution and one copy to the attorney for the judgment creditor within 14 days of the 23.37date postmarked on the correspondence mailed to the judgment debtor containing the 23.38exemption notices. The debtor is also required to include copies of bank statements for 24.1the prior 60 days with the exemption notice. In the event that there is no attorney for the 24.2judgment creditor, the notice must be sent directly to the judgment creditor. Failure of the 24.3judgment debtor to deliver the executed exemption notice or copies of the required bank 24.4statements for the prior 60 days does not constitute a waiver of any claimed right to an 24.5exemption. Upon timely receipt of a claim of exemption, funds not claimed to be exempt 24.6by the judgment debtor remain subject to the execution levy. All money claimed to be 24.7exempt shall be released to the judgment debtor upon the expiration of 24.8days after the date postmarked on the envelope containing the executed exemption 24.9notice mailed to the financial institution, or the date of personal delivery of the executed 24.10exemption notice to the financial institution, unless within that time the attorney for the 24.11judgment creditor interposes an objection to the exemption. 24.12 Subd. 3. 24.13An objection shall be interposed, within six business days of receipt by the creditor of 24.14an exemption claim from the debtor, by mailing or delivering one copy of the 24.15 24.16copy of the 24.17debtor 24.18 24.19The financial institution may rely on the date of mailing or delivery of a notice to it in 24.20computing any time periods in this section. The 24.21Notice of Hearing forms must be substantially in the form 24.22The court administrator may charge a fee of $1 for the filing of a Notice of Objection 24.23and Notice of Hearing. Upon the filing of a Notice of Objection and Notice of Hearing, 24.24the court administrator shall schedule the matter for hearing no sooner than five business 24.25days but no later than seven business days from the date of filing. A debtor may request 24.26continuance of the hearing by notifying the creditor and the court. The court shall schedule 24.27the continued hearing within seven days of the original hearing date. 24.28An order stating whether the debtor's funds are exempt shall be issued by the court 24.29within three days of the date of the hearing. 24.30 Subd. 4. Duties of financial institution if objection is made to exemption claim. 24.31Upon receipt of a 24.32 24.33shall retain the funds claimed to be exempt. 24.34 24.35 24.36 25.1 25.2 25.3 25.4 25.5claimed to be exempt until otherwise ordered by the court, upon mutual agreement of the 25.6parties, or until the garnishment lapses pursuant to section 571.79. 25.7 Subd. 5. Form of Notice of Objection and Notice of Hearing. 25.8 25.9
25.18 ..... 25.19 ..... 25.20 ..... 25.21 25.22 25.23 25.24 25.25 25.26 25.27 25.28 25.29 25.30 25.31 25.32 25.33 25.34 25.35 25.36 25.37 26.1 26.2 26.3 26.4 26.5 26.6 26.7 26.8
26.12following form:
27.2order for attachment (strike inapplicable language) for the following reason(s):
27.7relevant to the exemption claim. Failure to do so could delay the court's decision.) 27.8If the creditor receives all documents and materials relevant to the exemption claim 27.9before the hearing date, the creditor may agree with your exemption claim and you can 27.10avoid a hearing. 27.11Because a court hearing will be held on your claim that your funds are protected, 27.12your financial institution will retain the funds until it receives an order from the court. 27.13 27.14
27.23 27.24 27.25 ..... 27.26 ..... 27.27
27.36 27.37 28.1 Subd. 7. Release of funds. At any time during the procedure specified in this 28.2section, the judgment debtor or the attorney for the judgment creditor may, by a writing 28.3dated after the service of the writ of execution, direct the financial institution to release the 28.4funds in question to the other party. Upon receipt of a release, the financial institution 28.5shall release the funds as directed. 28.6 Subd. 8. Subsequent proceedings; bad faith claims. If in subsequent proceedings 28.7brought by the judgment debtor or the judgment creditor, the claim of exemption is not 28.8upheld, and the court finds that it was asserted in bad faith, the judgment creditor shall be 28.9awarded actual damages, costs, and reasonable attorney fees resulting from the additional 28.10proceedings, and an amount not to exceed $100. If the claim of exemption is upheld, and 28.11the court finds that the judgment creditor disregarded the claim of exemption in bad faith, 28.12the judgment debtor shall be awarded costs, reasonable attorney fees, actual damages, and 28.13an amount not to exceed $100. It is not considered bad faith for a judgment creditor 28.14to object to an improperly completed or incomplete exemption claim. The underlying 28.15judgment must be modified to reflect assessment of damages, costs, and attorney fees. 28.16However, if the party in whose favor a penalty assessment is made is not actually indebted 28.17to the party's attorney for fees, the attorney's fee award shall be made directly to the 28.18attorney and if not paid, an appropriate judgment in favor of the attorney shall be entered. 28.19Upon motion of any party in interest, on notice, the court shall determine the validity of 28.20any claim of exemption, and may make any order necessary to protect the rights of those 28.21interested. No financial institution is liable for damages for complying with this section. 28.22Both copies of an exemption claim or an objection to an exemption claim must be mailed 28.23or delivered on the same date. The financial institution may rely on the date of mailing or 28.24delivery of a notice to it in computing any time periods in this section. 28.25 Sec. 4. Minnesota Statutes 2008, section 571.71, is amended to read: 28.26571.71 GARNISHMENT; WHEN AUTHORIZED. 28.27As an ancillary proceeding to a civil action for the recovery of money, a creditor 28.28may issue a garnishment summons as provided in this chapter against any third party in 28.29the following instances: 28.30(1) at the time the civil action is commenced or at any time after the commencement 28.31of the civil action, but before the entry of a judgment, if the court orders the issuance of 28.32the garnishment summons pursuant to section 28.33(2) at any time 28.34upon the debtor in the civil action when a judgment by default could have, but has not, 28.35been entered pursuant to rule 55.01(a) of the Minnesota Rules of Civil Procedure for 29.1the District Courts. Garnishment under this clause is effective only after the Notice of 29.2Intent to Garnish form and the Exemption form is served on the debtor at any time 20 or 29.3more days after the service of the Summons and Complaint and, in addition, the creditor 29.4does not receive an answer from the debtor within 25 days after service of the Notice of 29.5Intent to Garnish. The Notice of Intent to Garnish form and the Exemption form must be 29.6substantially in the form set forth in section 571.72, subdivision 10. If a creditor sends a 29.7Notice of Intent to Garnish form to a debtor under this clause, the creditor cannot obtain a 29.8default judgment against the debtor under rule 55.01(a) of the Minnesota Rules of Civil 29.9Procedure for the District Court until 25 days after the service of the Notice of Intent to 29.10Garnish form. No filing of a pleading or other documents by the creditor is required to 29.11issue a garnishment summons under this clause; however, the creditor must comply with 29.12the service requirement of section 29.13(3) at any time after entry of a money judgment in the civil action. 29.14 Sec. 5. Minnesota Statutes 2008, section 571.72, is amended by adding a subdivision 29.15to read: 29.16 Subd. 10. Exemption notice for prejudgment garnishment. 29.17EXEMPTION NOTICE 29.18IMPORTANT NOTICE: A garnishment summons may be served on your 29.19employer, bank, or other third parties without any further court proceeding or notice 29.20to you. See the attached Notice of Intent to Garnish for more information. 29.21The following money and wages may be protected (the legal word is exempt) 29.22from garnishment: 29.231. Financial institutions/bank 29.24Some of the money in your account may be protected because you receive 29.25government benefits from one or more of the following places: 29.26MFIP- Minnesota family investment program 29.27GA- general assistance 29.28EA- emergency assistance 29.29MA- medical assistance 29.30GAMC- general assistance medical care 29.31EGA- emergency general assistance 29.32MSA- Minnesota supplemental aid 29.33MSA-EA – MSA emergency assistance 29.34SSI- Supplemental Security Income 29.35MinnesotaCare 30.1Medicare part B premium payments 30.2Medicare part D extra help 30.3Energy assistance 30.4Social Security benefits 30.5Unemployment benefits 30.6Workers' compensation 30.7Veterans' benefits 30.8Sending the undersigned creditor a copy of BANK STATEMENTS that 30.9show what was in your account for the past 60 days may give the creditor enough 30.10information about your exemption claim to avoid a garnishment. 30.112. Earnings 30.12Your earnings are completely protected from garnishment because: 30.13All of your earnings (wages) because: 30.14You get government benefits (see list of government benefits) 30.15You currently receive other assistance based on need 30.16You have received government benefits in the last six months 30.17You were in jail or prison in the last six months 30.18Your wages are only protected for 60 days after they are deposited in your account 30.19so it would be helpful if you immediately send the undersigned creditor a copy of 30.20BANK STATEMENTS that show what was in your account for the past 60 days. 30.21Some of your earnings (wages) 30.22If you did not check the box for all earnings, some of your earnings are still 30.23protected for 20 days after they were deposited in your account. The amount protected 30.24is the larger amount of: 30.2575 percent of your wages (after taxes are taken out); or 30.26(insert the sum of the current federal minimum wage) multiplied by 40. 30.27The money from the following may also be exempt for 20 days after they are 30.28deposited in your account. 30.29An accident, disability, or retirement pension or annuity 30.30Payments to you from a life insurance policy 30.31Earnings of your child who is under 18 years of age 30.32Child support 30.33Money paid to you from a claim for damage or destruction of property. 30.34Property includes household goods, farm tools or machinery, tools for your job, business 30.35equipment, a mobile home, a car, a musical instrument, a pew or burial lot, clothes, 30.36furniture, or appliances. 31.1Death benefits paid to you. 31.2YOU WILL BE ABLE TO CLAIM THESE EXEMPTIONS WHEN YOU 31.3RECEIVE NOTICE OF THE GARNISHMENT (OR TEN DAYS PRIOR TO A 31.4WAGE GARNISHMENT.) BUT IF YOU BELIEVE THE MONEY IN YOUR BANK 31.5ACCOUNT IS EXEMPT OR YOUR WAGES ARE EXEMPT YOU SHOULD 31.6IMMEDIATELY CONTACT THE PERSON BELOW TO DISCUSS YOUR 31.7EXEMPTION AND POSSIBLY AVOID GARNISHMENT.
31.11IMPORTANT! READ THIS CAREFULLY!
31.12NOTICE OF INTENT TO GARNISH
31.16you did not send a written "Answer" to the Summons and Complaint served on you 31.17over 20 days ago. 31.18There is no case filed in court, but because you did not send a written "Answer" the 31.19creditor may serve a garnishment summons on your employer, bank or other third parties. 31.20This means that your money or wages can be garnished (held or taken). Under Minnesota 31.21law, this can happen anytime 20 days after the date you receive this notice. 31.22There will be NO COURT HEARING or any further notice to you prior to a 31.23garnishment if you do nothing. There may not be a file open at the Clerk of the Court's 31.24office. There are things you can do to avoid a garnishment, but you must act quickly. 31.25Please read these instructions carefully. You have 20 days to do one of the following: 31.261. Send an Answer. If you do not think you owe the money or if you have a legal 31.27reason that you did not pay, send a written "Answer" to the Summons and Complaint. 31.28Your "Answer" should tell the creditor why you think you do not owe some or all of 31.29the money. Contact a lawyer if you do not know what to do, need help, or have any 31.30questions about the debt. 31.312. Claim an Exemption. Even if you do not have a defense to the complaint, some 31.32of your money may be protected (the legal word is exempt) from garnishment. This 31.33means it is protected and cannot be taken. Prior to garnishment, the creditor will send 31.34you a form to claim these exemptions but you can possibly avoid the garnishment action 31.35by contacting the person below immediately to claim your exemption. Attached to this 31.36notice is a list of exemptions you may be able to claim. 32.13. If you do not have a defense and your money is not exempt you can call the 32.2person below before the 20 days are up and try to set up a payment plan that works for 32.3both you and your creditor. You can contact the person below at any time to try to work 32.4out a payment plan, but if you wait too long or cannot agree about a payment plan, they 32.5may garnish or levy your money or wages. 32.6If you do not do any of these things, your money can be garnished. The creditor 32.7can garnish your wages, bank accounts, or other assets. They do not have to go to court to 32.8let you know when they start taking your money.
32.15 Sec. 6. Minnesota Statutes 2008, section 571.913, is amended to read: 32.16571.913 EFFECT OF EXEMPTION NOTICE. 32.17Within two business days after receipt of the garnishment summons and exemption 32.18notices, the financial institution shall serve upon the debtor two copies of the exemption 32.19notice. The financial institution shall serve the notice by first class mail to the last known 32.20address of the debtor. If no claim of exemption is received by the financial institution 32.21within 14 days after the exemption notices are mailed to the debtor, the funds remain 32.22subject to the garnishment summons. If the debtor elects to claim an exemption, the debtor 32.23shall complete the exemption notice, sign it under penalty of perjury, and deliver one copy 32.24to the financial institution and one copy to the attorney for the creditor within 14 days of 32.25the date postmarked on the correspondence mailed to the debtor containing the exemption 32.26notices. The debtor is also required to include copies of bank statements for the prior 60 32.27days with the exemption notice. In the event that there is no attorney for the creditor, 32.28then the notice must be sent directly to the creditor. Failure of the debtor to deliver the 32.29executed exemption notice or copies of the required bank statements for the prior 60 days 32.30does not constitute a waiver of a claimed right to an exemption. Upon timely receipt of a 32.31claim of exemption, funds not claimed to be exempt by the debtor remain subject to the 32.32garnishment summons. All money claimed to be exempt shall be released to the debtor 32.33upon the expiration of 32.34containing the executed exemption notice mailed to the financial institution, or the date 32.35of personal delivery of the executed exemption notice to the financial institution, unless 32.36within that time the creditor interposes an objection to the exemption. 33.1 Sec. 7. Minnesota Statutes 2008, section 571.914, is amended to read: 33.2571.914 OBJECTION TO EXEMPTION CLAIM. 33.3 Subdivision 1. Objections and request for hearing. An objection shall be 33.4interposed, within six business days of receipt by the creditor of an exemption claim from 33.5the debtor, by mailing or delivering one copy of the 33.6and Notice of Hearing to the financial institution and one copy of the 33.7Notice of Objection and Notice of Hearing to the debtor. 33.8 33.9 33.10 33.11notice to it in computing any time periods in this section. 33.12The 33.13Hearing 33.142 33.15 33.16 33.17may charge a fee of $1 for the filing of a 33.18Hearing. Upon the filing of a 33.19court administrator shall schedule the matter for hearing no sooner than five business days 33.20but no later than 33.21 33.22 33.23may request continuance of the hearing by notifying the creditor and the court. The court 33.24shall schedule the continued hearing within seven days of the original hearing date. 33.25An order stating whether the debtor's funds are exempt shall be issued by the court 33.26within three days of the date of the hearing. 33.27 Subd. 2. Form of Notice of Objection and Notice of Hearing. (a) The 33.28 33.29the following form:
34.18execution, order for attachment (strike inapplicable language) for the following reason(s):
34.23relevant to the exemption claim. Failure to do so could delay the court's decision.) 34.24If the creditor receives all documents and materials relevant to the exemption claim 34.25before the hearing date, the creditor may agree with your exemption claim and you can 34.26avoid a hearing. 34.27Because 34.28are protected, your financial institution will retain the funds 34.29 34.30 34.31 34.32 34.33receives an order from the court. 34.34 34.35 34.36 34.37 34.38 35.1 35.2 35.3 35.4 35.5 35.6 35.7 35.8 35.9 35.10 35.11 35.12 35.13 35.14 35.15
35.19
35.27 35.28 35.29
36.2 36.3 Subd. 4. Duties of financial institution if objection is made to exemption claim. 36.4Upon receipt of a 36.5creditor within the specified seven-day period, the financial institution shall retain the 36.6funds claimed to be exempt. 36.7 36.8 36.9 36.10 36.11 36.12until otherwise ordered by the court, upon mutual agreement of the parties, or until the 36.13garnishment lapses pursuant to section 36.14 Sec. 8. Minnesota Statutes 2008, section 571.925, is amended to read: 36.15571.925 FORM OF NOTICE. 36.16 Subdivision 1. Exemption notice. The ten-day notice informing a debtor that a 36.17garnishment summons may be used to garnish the earnings of an individual must be 36.18substantially in the following form:
36.28 36.29 36.30 36.31 36.32 36.33 36.34 36.35 37.1 37.2 37.3 37.4 37.5 37.6 37.7 37.8 37.9 37.10 37.1137.12 37.13 37.14 37.15 37.16 37.17 37.18 37.19 37.20 37.21 37.22 37.23 37.24
37.31 37.3237.33 37.34
38.2 38.3
38.8
38.12 38.13 38.14 38.15
38.28IMPORTANT NOTICE
38.29YOUR FUNDS HAVE BEEN LEVIED 38.30The Creditor has frozen money in your account at your financial institution. The 38.31account is frozen for 14 days from the date of this notice. 38.32Some of your money in your account may be protected (the legal word is 38.33exempt). You may be able to get it sooner than 14 days if you act quickly and follow 38.34the instructions on the next page. 38.35The attached form lists some different sources of money in your account that are 38.36protected. If your money is from one or more of these sources, check the box on the 38.37form next to the sources of your money. If it is from one of these sources, the Creditor 38.38cannot take it. 39.1BUT, you must follow the instructions and return the exemption form and 39.2copies of your bank statements from the last 60 days to have the bank unfreeze your 39.3money. If you do not follow the instructions or your creditor gets an order from the court 39.4or writ of execution, your financial institution will give the money to the Creditor. If that 39.5happens and it is protected, you can still get it back from the creditor later, but that is not 39.6as easy to do as filling in the form now. 39.7See next pages for instructions and the exemption form. 39.8 Subd. 2. Form of instructions. The instructions must be substantially in the 39.9following form: 39.10INSTRUCTIONS 39.11Note: The creditor is who you owe the money to. You are the debtor.39.121. Fill out the attached exemption form in this packet. 39.13If you check one of the boxes, you should also give proof that shows that some 39.14or all of the money in your account is from one or more of the protected sources. 39.15Creditors may ask for a hearing if they question your exemptions. To avoid a hearing: 39.16Case numbers should be added to the form. Copies of documents should be 39.17sent with the form. 39.18NOTICE: You must send copies of your bank statements for the past 60 days 39.19before the garnishment. If you do not send bank statements with your exemption 39.20claim, the financial institution may release your money to the creditor. 39.212. Sign the exemption form. Make three copies. Keep one for yourself. 39.223. Mail or deliver the other copies of the form by (insert date). 39.23BOTH COPIES MUST BE MAILED OR DELIVERED THE SAME DAY. 39.24One copy of the form goes to:
39.34HOW THE PROCESS WORKS 39.35If You Do Not Send in the Exemption Form and Bank Statements:39.3614 days after the date of this letter some or all of your money may be turned over to 39.37the creditor or to the sheriff pursuant to Minnesota statute. 40.1If You Send in the Exemption Form and Bank Statements: 40.2Any money that is NOT protected can be turned over to the creditor or the sheriff. 40.3If the Creditor Does Not Object: 40.4The financial institution will unfreeze your money six business days after they 40.5get your completed form. 40.6If the Creditor Objects: 40.7The money you have said is protected on the form will be held by the bank. The 40.8creditor has six business days to object (disagree) and ask the court to hold a hearing. You 40.9will receive a Notice of Objection and a Notice of Hearing. 40.10The financial institution will hold the money until a court decides whether your 40.11money is protected or not. 40.12You may want to talk to a lawyer for advice about this process. If you are low 40.13income you can call Legal Aid. 40.14PENALTIES: 40.15If you claim that your money is protected and a court decides you made that claim 40.16in bad faith, the court can order you to pay costs, actual damages, attorney fees, and an 40.17additional amount of up to $100. For example, it may be bad faith if you claim you receive 40.18government benefits that you do not receive. 40.19If the creditor made a bad faith objection to your claim that your money is protected, 40.20the court can order them to pay costs, actual damages, attorney fees, and an additional 40.21amount of up to $100. 40.22 Subd. 3. Format of exemption form. The exemption form must be substantially 40.23in the following format: 40.24EXEMPTION FORM
41.42about my benefits to the above-named creditor, or its attorney. The information will ONLY 41.43concern whether I get benefits or not, or whether I have gotten them in the past six months. 41.44If I was an inmate in the last six months, I give my permission to the correctional 41.45institution to tell the above-named creditor that I was an inmate there. 42.1YOU MUST SIGN AND SEND THIS FORM BACK TO THE CREDITOR'S 42.2ATTORNEY AND THE BANK. FILL IN THE BLANKS BELOW AND GO BACK 42.3TO THE INSTRUCTIONS TO MAKE SURE YOU DO IT CORRECTLY. 42.4I have mailed or delivered a copy of this form to:
42.10address listed in the instructions.
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