By: Dan Spicer
Minnesota Governor Tim Walz issued 108 executive orders in 2020. With 5 executive orders already issued in the first two weeks of 2021, Minnesotans are on track for another year of constantly refreshing our news pages on our phones to see what new and exciting rules (and modifications to new and exciting rules) are put in place for us all to enjoy. These executive orders exert control over virtually every facet of our society, and any slight modification brings about enormous changes in how society functions. This blog post will focus specifically on consumer rights when wages have been garnished.
Wait a minute, I thought Executive Order 20-50 said my wages couldn’t be garnished!
The order went into effect on May 4, 2020 and provided temporary relief from certain garnishment actions on individuals. While debt collection firms could still make collection calls and file lawsuits against debtors, the income stream of financial institutions and debt collection firms was limited to an appreciable extent by this executive order through a prohibition on garnishments. In short, creditors could not start a new garnishment for a consumer debt for as long as the peacetime emergency lasts. This does not apply to child or spousal support.
What does this mean?
If you have a judgment against you because of old credit cards or auto loans for example, whoever was in charge of collecting on that judgment debt could not attempt to collect the debt by garnishing under EO 20-50.
How has this changed?
An order modifying EO 20-50 went into effect January 7, 2021: Executive Order 21-02. The new order strikes and adds language to EO 20-50, which can be confusing. But the most important change for consumers/judgment debtors is the addition of the following language:
Wage garnishments and levies of consumer debtors permitted by Minnesota Statutes 2020, Chapters 550, 551, and 571, are permitted for all judgments entered prior to May 4, 2020, and the salary and earnings of said consumer debtors are not exempt based upon receipt of a subsequent Recovery Rebate notwithstanding paragraph 1 or 2, except if the consumer debtor is a recipient of any of the public assistance programs enumerated under Minnesota Statutes 2020, section 550.37, subdivision 14.
This means that the financial institutions and debt collection firms which have been lying in wait and unable to serve garnishments for 8 months have suddenly been unleashed. Minnesota judgment debtors are about to witness a tidal wave of wage garnishments. A colleague of mine in the debt collection world indicated the firm’s Minnesota attorney team was looking at over 1,000 wage garnishments in their queue that needed to be executed and served out. That’s not for the week or the month—that was Monday.
Importance of May 4, 2020.
If you have a judgment against you which predates May 4, 2020, you may expect a wage garnishment in due course.
However, if a judgment was entered against you after May 4, 2020, and your employer is served with a wage garnishment summons, this is a violation of the executive orders which are in effect as of this writing. If this is the situation, you may be entitled to monetary relief. Debt collection firms will make mistakes, especially when the law changes so rapidly. Judgment debtors may not be aware of protections and remedies afforded to them in this rapidly changing and often confusing legal landscape.
Contact an attorney.
The rules by which we must abide as Minnesotans change daily. This blog may be invalidated by a new executive order a day after it goes up on our Firm’s website. But as of this writing, if your employer was served with a wage garnishment summons pursuant to a judgment entered against you AFTER May 4, 2020, contact us to learn about your rights under EO 20-50 and EO 21-02.
Our attorneys provide counsel to clients in preparing claims and settling disputes for consumers who have been harmed by debt collectors violating the law.
To learn more about the legal representation and guidance we provide to our clients about consumer matters, please call us at 952-432-3136 or, if you prefer, contact us via e-mail.