HF 3170

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to debtor creditor relations; allowing certain recoveries by crime victims
and judgment creditors; amending Minnesota Statutes 2004, sections 550.136,
subdivisions 3, 9; 550.143, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin CITATION.
new text end

new text begin Sections 2 to 4 may be cited as the Fairness in Restitution for Victims and Judgment
Creditors Act.
new text end

Sec. 2.

Minnesota Statutes 2004, section 550.136, subdivision 3, is amended to read:

Subd. 3.

Limitation on levy on earnings.

Unless the judgment is for child support,
the maximum part of the aggregate disposable earnings of an individual for any pay period
subjected to an execution levy may not exceed the lesser of:

(1) 25 percent of the judgment debtor's disposable earnings; or

(2) the amount by which the judgment debtor's disposable earnings exceed the
following product: 40 times the federal minimum hourly wages prescribed by section
6(a)(1) of the Fair Labor Standards Act of 1938, United States Code, title 29, section
206(a)(1), in effect at the time the earnings are payable, times the number of work weeks
in the pay period new text begin , less $3.50 per work week if the execution levy is for a crime victim
restitution order under section 611A.04 or for a civil judgment docketed with the district
court new text end . When a pay period consists of other than a whole number of work weeks, each day
of that pay period in excess of the number of completed work weeks shall be counted as a
fraction of a work week equal to the number of excess work days divided by the number
of days in the normal work week.

If the judgment is for child support, the levy may not exceed:

(1) 50 percent of the judgment debtor's disposable income, if the judgment debtor is
supporting a spouse or dependent child and the judgment is 12 weeks old or less (12 weeks
to be calculated to the beginning of the work week in which the execution levy is received);

(2) 55 percent of the judgment debtor's disposable income, if the judgment debtor is
supporting a spouse or dependent child, and the judgment is over 12 weeks old (12 weeks
to be calculated to the beginning of the work week in which the execution levy is received);

(3) 60 percent of the judgment debtor's disposable income, if the judgment debtor
is not supporting a spouse or dependent child and the judgment is 12 weeks old or less
(12 weeks to be calculated to the beginning of the work week in which the execution
levy is received); or

(4) 65 percent of the judgment debtor's disposable income, if the judgment debtor is
not supporting a spouse or dependent child, and the judgment is over 12 weeks old (12
weeks to be calculated to the beginning of the work week in which the execution levy is
received).

Execution levies under this section on judgments for child support are effective until
the judgments are satisfied if the judgment creditor is a county and the employer is notified
by the county when the judgment is satisfied.

No court may make, execute, or enforce an order or any process in violation of
this section.

Sec. 3.

Minnesota Statutes 2004, section 550.136, subdivision 9, is amended to read:

Subd. 9.

Execution earnings disclosure form and worksheet.

The judgment
creditor shall provide to the sheriff for service upon the judgment debtor's employer an
execution earnings disclosure form and an earnings disclosure worksheet with the writ of
execution, that must be substantially in the form set forth below.

STATE OF MINNESOTA	DISTRICT COURT
COUNTY OF . .	. . JUDICIAL DISTRICT
	FILE NO. ............
. (Judgment Creditor)
against	EARNINGS
. (Judgment Debtor)	EXECUTION
and	DISCLOSURE
. (Third Party)

DEFINITIONS

"EARNINGS": For the purpose of execution, "earnings" means compensation
paid or payable to an employee for personal services or compensation paid or payable
to the producer for the sale of agricultural products; milk or milk products; or fruit or
other horticultural products produced when the producer is operating a family farm, a
family farm corporation, or an authorized farm corporation, as defined in section 500.24,
subdivision 2, whether denominated as wages, salary, commission, bonus, or otherwise,
and includes periodic payments pursuant to a pension or retirement.

"DISPOSABLE EARNINGS": Means that part of the earnings of an individual
remaining after the deduction from those earnings of amounts required by law to be
withheld. (Amounts required by law to be withheld do not include items such as health
insurance, charitable contributions, or other voluntary wage deductions.)

"PAYDAY": For the purpose of execution, "payday(s)" means the date(s) upon
which the employer pays earnings to the debtor in the ordinary course of business. If
the judgment debtor has no regular payday, payday(s) means the 15th and the last day
of each month.

THE THIRD PARTY/EMPLOYER MUST ANSWER THE FOLLOWING
QUESTIONS:

(1) Do you now owe, or within 70 days from the date the execution levy was served
on you, will you or may you owe money to the judgment debtor for earnings?

Yes .

N o .

(2) Does the judgment debtor earn more than $... per week? (this amount is the
federal minimum wage per week)

Yes .

No .

INSTRUCTIONS FOR COMPLETING THE

EARNINGS DISCLOSURE

A. If your answer to either question 1 or 2 is "No," new text begin and item B does not apply, new text end then
you must sign the affirmation below and return this disclosure to the sheriff within 20 days
after it was served on you, and you do not need to answer the remaining questions.

B. If your answers to both questions 1 and 2 are "Yes," new text begin or if the execution levy
is for a crime victim restitution order under section 611A.04 or for a civil judgment
docketed with the district court, new text end you must complete this form and the Earnings Disclosure
Worksheet as follows:

For each payday that falls within 70 days from the date the execution levy was
served on you, YOU MUST calculate the amount of earnings to be retained by
completing steps 3 through 11 on page 2, and enter the amounts on the Earnings
Disclosure Worksheet. UPON REQUEST, THE EMPLOYER MUST PROVIDE
THE DEBTOR WITH INFORMATION AS TO HOW THE CALCULATIONS
REQUIRED BY THIS DISCLOSURE WERE MADE.

Each payday, you must retain the amount of earnings listed in column I on the
Earnings Disclosure Worksheet.

You must pay the attached earnings and return this earnings disclosure form and the
Earnings Disclosure Worksheet to the sheriff and deliver a copy of the disclosure
and worksheet to the judgment debtor within ten days after the last payday that falls
within the 70-day period. If the judgment is wholly satisfied or if the judgment
debtor's employment ends before the expiration of the 70-day period, your
disclosure and remittance should be made within ten days after the last payday for
which earnings were attached.

For steps 3 through 11, "columns" refers to columns on the Earnings Disclosure
Worksheet.

(3)	COLUMN A.		Enter the date of judgment debtor's payday.
(4)	COLUMN B.		Enter judgment debtor's gross earnings for each payday.
(5)	COLUMN C.		Enter judgment debtor's disposable earnings for each payday.
(6)	COLUMN D.		Enter 25 percent of disposable earnings. (Multiply column C by .25.)
(7)	COLUMN E.		Enter here 40 times the hourly federal minimum wage ($..........) times the number of work weeks included in each payday new text begin , less $3.50 per work week if the execution levy is for a crime victim restitution order under section 611A.04 or a civil judgment docketed with the district court new text end . (Note: If a payday includes days in excess of whole work weeks, the additional days should be counted as a fraction of a work week equal to the number of work days in excess of a whole work week divided by the number of work days in a normal work week.)
(8)	COLUMN F.		Subtract the amount in column E from the amount in column C, and enter here.
(9)	COLUMN G.		Enter here the lesser of the amount in column D and the amount in column F.
(10)	COLUMN H.		Enter here any amount claimed by you as a setoff, defense, lien, or claim, or any amount claimed by any other person as an exemption or adverse interest which would reduce the amount of earnings owing to the judgment debtor. (Note: Any indebtedness to you incurred within ten days prior to your receipt of the first execution levy on a debt may not be set off against the earnings otherwise subject to this levy. Any wage assignment made by the judgment debtor within ten days prior to your receipt of the first execution levy on a debt is void.)
			You must also describe your claim(s) and the claims of others, if known, in the space provided below the worksheet and state the name(s) and address(es) of these persons.
			Enter zero in column H if there are no claims by you or others which would reduce the amount of earnings owing to the judgment debtor.
(11)	COLUMN I.		Subtract the amount in column H from the amount in column G and enter here. This is the amount of earnings that you must remit for the payday for which the calculations were made.

AFFIRMATION

I, ................... (person signing Affirmation), am the third party/employer or I am
authorized by the third party/employer to complete this earnings disclosure, and have done
so truthfully and to the best of my knowledge.

DATED: . .	.
	Signature
	.
	Title
	.
	Telephone Number
EARNINGS DISCLOSURE WORKSHEET	.
	Debtor's Name

A		B		C
Payday Date		Gross Earnings		Disposable Earnings

1.	.		$ .		$ .
2.	.		.		.
3.	.		.		.
4.	.		.		.
5.	.		.		.
6.	.		.		.
7.	.		.		.
8.	.		.		.
9.	.		.		.
10.	.		.		.

D		E		F
25% of Column C		40 X Min. Wage		Column C minus Column E

1.	.		.		.
2.	.		.		.
3.	.		.		.
4.	.		.		.
5.	.		.		.
6.	.		.		.
7.	.		.		.
8.	.		.		.
9.	.		.		.
10.	.		.		.

G		H		I
Lesser of Column D and Column F		Setoff, Lien, Adverse Interest, or Other Claims		Column G minus Column H

1.	.		.		.
2.	.		.		.
3.	.		.		.
4.	.		.		.
5.	.		.		.
6.	.		.		.
7.	.		.		.
8.	.		.		.
9.	.		.		.
10.	.		.		.
			TOTAL OF COLUMN I		$ .

*If you entered any amount in column H for any payday(s), you must describe below
either your claims, or the claims of others. For amounts claimed by others, you must both
state the names and addresses of such persons, and the nature of their claim, if known.

.

.

.

AFFIRMATION

I, ................. (person signing Affirmation), am the third party or I am authorized by
the third party to complete this earnings disclosure worksheet, and have done so truthfully
and to the best of my knowledge.

			.
			Signature
Dated:		.	(...) .
		Title	Phone Number

Sec. 4.

Minnesota Statutes 2004, section 550.143, subdivision 3, is amended to read:

Subd. 3.

Exemption notice.

If the levy is on funds of a judgment debtor who is a
natural person and if the funds to be levied are held on deposit at any financial institution,
the judgment creditor or its attorney shall provide the sheriff with two copies of an
exemption notice, which must be substantially in the form set forth below. The sheriff
shall serve both copies of the exemption notice on the financial institution, along with the
writ of execution. Failure of the sheriff to serve the exemption notices renders the levy
void, and the financial institution shall take no action. However, if this subdivision is
being used to execute on funds that have previously been garnished in compliance with
section 571.71, the judgment creditor is not required to serve additional exemption notices.
In that event, the execution levy shall only be effective as to the funds that were subject
to the prior garnishment. Upon receipt of the writ of execution and exemption notices,
the financial institution shall retain as much of the amount due under section 550.04 as
the financial institution has on deposit owing to the judgment debtor, but not more than
110 percent of the amount remaining due on the judgment.

STATE OF MINNESOTA			DISTRICT COURT
COUNTY OF .		.	JUDICIAL DISTRICT
. (Judgment Creditor)
. (Judgment Debtor)
TO: Debtor		EXEMPTION NOTICE

An order for attachment, garnishment summons, or levy of execution (strike
inapplicable language) has been served on ............. (Bank or other financial institution
where you have an account.)

Your account balance is $........

The amount being held is $........

However, all or a portion of the funds in your account will normally be exempt from
creditors' claims if they are in one of the following categories:

(1) relief based on need new text begin , less an amount equal to $15 per month new text end . This includes
the Minnesota Family Investment Program (MFIP), Emergency Assistance (EA), Work
First Program, Medical Assistance (MA), General Assistance (GA), General Assistance
Medical Care (GAMC), Emergency General Assistance (EGA), Minnesota Supplemental
Aid (MSA), MSA Emergency Assistance (MSA-EA), deleted text begin Supplemental Security Income
(SSI), deleted text end and Energy Assistance;

(2) Social Security benefits (Old Age, Survivors, or Disability Insurance) new text begin or
Supplemental Security Income (SSI) new text end ;

(3) unemployment benefits, workers' compensation, or veterans' benefits;

(4) an accident, disability, or retirement pension or annuity;

(5) life insurance proceeds;

(6) the earnings of your minor child and any child support paid to you; or

(7) money from a claim for damage or destruction of exempt property (such as
household goods, farm tools, business equipment, a mobile home, or a car).

The following funds are also exempt:

(8) all earnings of a person in category (1) new text begin , less an amount equal to $15 per month new text end ;

(9) all earnings of a person who has received relief based on need, or who has been
an inmate of a correctional institution, within the last six months new text begin , less an amount equal
to $15 per month new text end ;

(10) 75 percent of every debtor's after tax earnings; and

(11) all of a judgment debtor's after tax earnings below 40 times the federal minimum
wage new text begin , less $3.50 per work week if the execution levy is for a crime victim restitution order
under section 611A.04 or for a civil judgment docketed with the district court new text end .

TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:

Categories (10) and (11): 20 days

Categories (8) and (9): 60 days

All others: no time limit, as long as funds are traceable to the exempt source. (In
tracing funds, the first-in, first-out method is used. This means money deposited first
is spent first.) The money being sought by the judgment creditor is being held in your
account to give you a chance to claim an exemption.

TO CLAIM AN EXEMPTION:

Fill out, sign, and mail or deliver one copy of the attached exemption claim form to
the institution which sent you this notice and mail or deliver one copy to the judgment
creditor's attorney. In the event that there is no attorney for the judgment creditor, then
the notice shall be sent directly to the judgment creditor. The address for the judgment
creditor's attorney or the judgment creditor is set forth below. Both copies must be
mailed or delivered on the same day.

NOTE: You may help resolve your claim faster if you send to the creditor's
attorney written proof or documents that show why your money is exempt. If
you have questions regarding the documents to send as proof of an exemption,
call the creditor's attorney. If you do not send written proof and the creditor's
attorney has questions about your exemption claim, the creditor's attorney
may object to your claim which may result in a further delay in releasing your
exempt funds.

If the financial institution does not get the exemption claim back from you within 14
days of the date they mailed or gave it to you, they will be free to turn the money over to
the sheriff or the judgment creditor. If you are going to claim an exemption, do so as soon
as possible, because your money may be held until it is decided.

IF YOU CLAIM AN EXEMPTION:

(1) nonexempt money can be turned over to the judgment creditor or sheriff;

(2) the financial institution will keep holding the money claimed to be exempt; and

(3) seven days after receiving your exemption claim, the financial institution will
release the money to you unless before then it receives an objection to your exemption
claim.

IF THE JUDGMENT CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:

the institution will hold the money until a court decides if your exemption claim is
valid, BUT ONLY IF the institution gets a copy of your court motion papers asserting
the exemption WITHIN TEN DAYS after the objection is personally served on you, or
within 13 days from the date the objection is mailed to you. You may wish to consult an
attorney at once if the creditor objects to your exemption claim.

MOTION TO DETERMINE EXEMPTION:

At any time after your funds have been held, you may ask for a court decision on the
validity of your exemption claim by filing a request for hearing which may be obtained
at the office of the court administrator of the above court.

PENALTIES:

If you claim an exemption in bad faith, or if the judgment creditor wrongly objects
to an exemption in bad faith, the court may order the person who acted in bad faith to pay
costs, actual damages, attorney fees, and an additional amount of up to $100.

	.
	.
	.
	.
	Name and address of (Attorney
	for) Judgment Creditor

EXEMPTION:

(a) Amount of exemption claim.

/ / I claim ALL the funds being held are exempt.

/ / I claim SOME of the funds being held are exempt.

The exempt amount is $ .

(b) Basis for exemption.

Of the 11 categories listed above, I am in category number ............ (If more than one
category applies, you may fill in as many as apply.) The source of the exempt funds is
the following:

.

.

.

(If the source is a type of relief based on need, list the case number and county:

case number: ...............;

county: ....................)

I hereby authorize any agency that has distributed relief to me or any correctional
institution in which I was an inmate to disclose to the above named creditor or its attorney
only whether or not I am or have been a recipient of relief based on need or an inmate of a
correctional institute within the last six months.

I have mailed or delivered a copy of the exemption notice to the judgment creditor
or judgment creditor's attorney if represented at the address indicated above.

		.
		DEBTOR
DATED: .		.
		.
		.
		DEBTOR ADDRESS
		.
		DEBTOR TELEPHONE NUMBER