Creditors seeking to collect debts can seize a person's bank account or wages through garnishment. Here is how it works:
• Many garnishments happen after a creditor's attorney obtains a court judgment. A garnishment also can occur if a debtor does not respond within 45 days to a lawsuit.
• To garnish a bank account, a creditor's attorney sends a notice to your bank. The bank typically freezes the money the same day it gets the notice.
• The bank customer is notified only after money is frozen, which can result in bounced checks and overdraft fees.
• To garnish wages, a creditor's attorney must first send a notice to you. The creditor must wait 10 days before papers are sent to your employer.
• Income from Social Security, unemployment insurance, veterans and some other government benefits kept in bank accounts can be frozen, but you are entitled to get the money back. Debtors must be sent a form to claim exemptions, which must be filled out and sent to the creditor's attorney and bank.
• If you don't claim exemptions, creditors can take part of your pay for 70 days. You get to keep 75 percent of net wages or 40 times the federal minimum wage, whichever is greater.
• Exemption or other garnishment disputes can go to a judge if a debtor files a motion.
• Some creditor attorneys will allow a repayment plan and release garnished funds as part of the arrangement.
• For more information about garnishment, visit the Minnesota Self-Help Center at tinyurl.com/2erdplx.
Sources: National Consumer Law Center, Minnesota Attorney General, www.toddmurraylaw.com, Legal Aid.