One of the worst parts about struggling to overcome debt, especially during or after divorce, is wage garnishment. In many instances, creditors who receive judgment against you can have your wages garnished directly from your paycheck. If this is happening to you, then you understand how negatively this impacts your life. Most of us need our full paycheck to continue to meet all of our obligations. If your paycheck is reduced, then you may struggle to make ends meet.
Minnesota Wage Garnishment Limits
In Minnesota, wage garnishment rules allow creditors to take the lesser of one of the following:
- 25% of the disposable earnings (after taxes and social security reductions); OR
- The amount of the disposable earnings that exceed 40 times the federal minimum hourly wage (currently $7.25/hour).
Wage Garnishment Process
Before a creditor can garnish your wages, the creditor must sue you and obtain a judgment from the court stating that you owe the creditor the amount of the debt. Once the creditor has obtained the judgment, the creditor will request a wage garnishment order from the court. The creditor will then send that order on to your employer, who will withhold the wage garnishment amount from your paycheck.
There are some instances in which your wages may be garnished without first obtaining a judgment from the court. These instances are related to the following debts:
- Unpaid income taxes
- Child support
- Defaulted student loans
Wage Garnishment and Employer Retaliation in Minnesota
Complying with wage garnishment orders can be a hassle for employers. In some instances, employers may decide it would be easier to fire the employee with the wage garnishment rather than comply with the wage garnishment process. However, this tactic is illegal in Minnesota.
Under Minnesota law, an employer is not allowed to terminate your employment or otherwise discipline you because of your wage garnishment. If an employer breaks this law, then the employee has 90 days to bring an action against the employer. The court may order a reinstatement of the employee or other relief the court feels is appropriate. The employee is also entitled to recover twice the amount of the wages lost as a result of the termination or other punishment.
Wage Garnishment and Bankruptcy
When your attorney files your bankruptcy case with the court, the first thing that happens is called the “automatic stay.” The automatic stay halts all actions by creditors to collect debts, including wage garnishments. No matter where you are at in the wage garnishment process (i.e. creditor just sued, creditor has obtained a judgment, creditor is garnishing wages, etc.), the automatic stay will stop the creditor from taking any further action to collect on the debt.
Further, if you have been garnished in an amount of $600 or more within 90 days of filing for bankruptcy, your attorney will be able to recover those funds after you file for bankruptcy. Therefore, it is very important to discuss any wage garnishment with your bankruptcy attorney.
Contact Us Today For A Free Consultation
Heimerl & Lammers can provide you with the assistance needed when dealing with wage garnishment during a divorce. Call our office today for a free initial consultation, expert advice, and professional service that can make all the difference in the world.