Protected Income and Assets Under the Law

Certain Income and Assets Are Protected Under the Law Without Filing Bankruptcy 

The typical assets of many consumers are protected without filing bankruptcy.  Income and assets that are protected under the law are “exempt” or protected from creditors.

For instance, the following income is protected under the law if the consumer properly asserts his rights in writing pursuant to the rules under the law after a judgment has been entered against the consumer:

  • Unemployment compensation
  • Social security income because of your age
  • Social security disability income
  • Pension and profit sharing income
  • Veteran’s benefits
  • 75% of all net wages are protected
  • Public assistance

This is a non-exclusive list.

In addition, most individuals’ assets are protected without filing bankruptcy.  For instance the following is protected:

  • Up to $390,000 in equity in your home
  • $4,600 in equity in your vehicle
  • $10,350 in household furniture, appliances and consumer electronics

This is a non-exclusive list.

However, if the consumer fails to assert their rights in a timely fashion after they’ve been garnished, their exemption rights may be lost.  That is why it is important to hire an experienced attorney who can protect your income and assets.

If you are garnished you should immediately call an attorney. We want you to call us.

Stopping Garnishments

The procedure for stopping a wage or bank account garnishment is quite specific.  There are specific deadlines if you have income that is protected.  For instance, if your bank account is garnished, you must send copies of 60 days of your bank statements to the debt collector and a notice of your exemption claim to both the collector and the bank within a certain number of days.

The failure to exercise your rights in a timely fashion will result in your funds being garnished.

You may request a hearing on a creditor’s objection to your written exemption claim.

The best way to stop garnishments is to call an experienced attorney.

Representing Debtors When They’re Sued

We represent debtors when they’re sued.  We do not recommend that you “act as your own lawyer.”

If you receive a summons and complaint you should immediately call an attorney.  In state court, an answer to a collection complaint must be served on the creditor’s attorney within 21 days after service of the summons and complaint on you.

There are procedural rules on what proper service is that a consumer doesn’t know, but lawyers understand.  In Minnesota state court a lawsuit is commenced when the summons and complaint are served on you.  For collection lawsuits, the summons and complaint do not have to be filed with the court administrator or contain a file number to begin or “commence” the lawsuit against you.

Under Minnesota law, a creditor can begin to garnish your wages or bank accounts 40 days after you’re served with a complaint if you fail to serve a proper answer on the attorney for the creditor.  This is called pre-judgment garnishment.

If you are sued (served with a summons and complaint) you should immediately call an attorney. We want you to call us.