Purpose of the Bill

This bill aims to modify existing laws concerning garnishment and bankruptcy in Minnesota. Specifically, it introduces new exemptions to protect certain debtor funds from being garnished by creditors, thereby providing financial relief to individuals facing such legal actions.

Main Provisions

• Exemption for Depository Accounts: The bill establishes a new exemption for funds held in depository accounts at financial institutions. Up to $1,000 in one or more of a debtor’s accounts can be protected from garnishment, regardless of the source of the money. This provides debtors with a degree of financial security by ensuring a minimum amount is accessible during garnishment procedures.

• Additional Exemption: This protection is supplemental, meaning it adds to any other garnishment exemptions the debtor might already qualify for under existing Minnesota statutes. However, it cannot be combined with the exemption under subdivision 28 of the same statute.

• Garnishment Procedure: When a financial institution receives a garnishment summons, it must ensure that either $1,000 or the total available in the debtor's accounts (whichever is less) remains intact in those accounts.

• Limitations: The exemption does not apply if the financial institution is asserting a contractual setoff or a security interest, except as otherwise specified in related legal subdivisions.

Significant Changes to Existing Law

• The new subdivision added to Minnesota Statutes section 550.37 specifically defines and enforces the exemption of up to $1,000 in debtor accounts from garnishment. This is a change from prior law where such a clear and specific protection for depository accounts may not have existed to this defined extent.

Relevant Terms

• Garnishment
• Bankruptcy
• Debtor
• Depository accounts
• Financial institution
• Exemption
• Contractual setoff
• Security interest