HF 334

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:36am

A bill for an act
relating to creditor remedies; prohibiting prejudgment garnishment in certain
circumstances; amending Minnesota Statutes 2008, sections 551.05, subdivisions
1a, 3, 4, by adding a subdivision; 571.71; 571.72, subdivision 4; 571.79; 571.912;
571.914, subdivisions 1, 2, 4; 571.93, subdivision 1; repealing Minnesota
Statutes 2008, sections 551.05, subdivisions 5, 6; 571.914, subdivision 3.

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

Section 1.

Minnesota Statutes 2008, section 551.05, subdivision 1a, is amended to read:

Subd. 1a.

Exemption notice.

If the writ of execution is being used by the attorney
to levy 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 attorney for the judgment creditor shall
serve with the writ of execution two copies of an exemption notice. The notice must be
substantially in the form set forth below. Failure of the attorney for the judgment creditor
to send the exemption notice renders the execution 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 attorney for
judgment creditor is not required to serve an additional exemption notice. 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 100 percent of
the amount remaining due on the judgment, or $10,000, whichever is less.

The notice informing a judgment debtor that an execution levy has been used
to attach funds of the judgment debtor to satisfy a claim must be substantially in the
following form:

STATE OF MINNESOTA				DISTRICT COURT
County of .				. JUDICIAL DISTRICT
.	(Judgment Creditor)
.	(Judgment Debtor)
TO: Judgment 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. This includes the Minnesota Family Investment Program
(MFIP), 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),
Supplemental Security Income (SSI), and Energy Assistance;

(2) Social Security benefits (Old Age, Survivors, or Disability Insurance);

(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);

(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;

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

(11) all of a judgment debtor's after tax earnings below 40 times the federal
minimum wage.

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. The address for the judgment creditor's attorney 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 they do 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 attorney for
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 deleted text begin , 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 deleted text end . You may wish to consult an attorney
at once if the judgment 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 judgment creditor's
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's
attorney at the address indicated above.

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

Sec. 2.

Minnesota Statutes 2008, section 551.05, subdivision 3, is amended to read:

Subd. 3.

Objection to exemption claim.

deleted text begin Objection shall be interposed by mailing
or delivering one copy of the written objection to the financial institution and one copy of
the written objection to the judgment debtor along with a copy of the judgment debtor's
claimed exemption form. Both copies of an objection to an exemption claim shall be
mailed or delivered on the same date. The financial institution may rely on the date
of mailing or delivery of a notice to it in computing any time periods in this section.
The written objection must be substantially in the form specified in subdivision 5. deleted text end new text begin If a
judgment creditor objects to a judgment debtor's exemption claim, the judgment creditor
shall obtain from the court administrator or a designated motion calendar deputy a date
and time for an evidentiary hearing on its objection. The judgment creditor shall serve on
the judgment debtor and financial institution, personally or by first class mail, a notice
of hearing on creditor's objection to debtor's exemption claim in the form specified in
subdivision 3a, on the same day that it obtains the hearing date. The hearing date obtained
by the judgment creditor must be no earlier than five business days and no later than ten
business days from the date the judgment creditor requests and obtains the hearing date.
An order stating whether the judgment debtor's funds are exempt must be issued by the
court within three days of the date of the hearing.
new text end

Sec. 3.

Minnesota Statutes 2008, section 551.05, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Notice of hearing on judgment creditor's objection to judgment
debtor's exemption claim. new text end

new text begin The judgment creditor's notice of hearing on its objection to
the judgment debtor's exemption claim must be in substantially the following form:
new text end

new text begin STATE OF MINNESOTA new text end				new text begin DISTRICT COURT new text end
new text begin County of . new text end				new text begin . JUDICIAL DISTRICT new text end
new text begin . new text end	new text begin (Judgment Creditor) new text end				new text begin NOTICE OF new text end
new text begin . new text end	new text begin (Judgment Debtor) new text end				new text begin HEARING ON new text end
new text begin . new text end	new text begin (Garnishee) (Third Party) new text end			new text begin JUDGMENT CREDITOR'S OBJECTION TO JUDGMENT DEBTOR'S EXEMPTION CLAIM new text end

new text begin The judgment creditor objects to your claim for exemption from garnishment, levy of
execution, order for attachment (strike inapplicable language) for the following reason(s):
new text end

new text begin . new text end
new text begin . new text end
new text begin . new text end

new text begin A hearing will be held in this case on (Date) at (Time) at (Place) to resolve whether
your funds at (Financial Institution) are exempt. You have claimed that such funds are
exempt because
. new text end

new text begin .
new text end

new text begin .
new text end

new text begin .
new text end

new text begin At the hearing, you will have to prove that your funds are exempt. If you do not
attend the hearing, the judge may order that your funds be released to the judgment
creditor. The judge will issue an order within three days of the hearing regarding whether
your funds are exempt.
new text end

new text begin Because the judgment creditor objected to your exemption claim, your financial
institution will retain the funds you claim to be exempt until it receives: (1) a written
release from either the judgment creditor or you; or (2) an order from the court regarding
whether your funds are exempt.
new text end

new text begin Dated: . new text end
	new text begin . new text end
	new text begin Judgment Creditor or Creditor's Attorney new text end
	new text begin . new text end
	new text begin . Address new text end

new text begin (Note to both parties: Bring with you to the hearing all documents and materials relevant
to the exemption claim and objection. Failure to do so could delay the court's decision.)
new text end

Sec. 4.

Minnesota Statutes 2008, section 551.05, subdivision 4, is amended to read:

Subd. 4.

Duties of financial institution if objection is made to exemption claim.

Upon receipt of a written objection from the judgment creditor within the specified
seven-day period, the financial institution shall retain the funds claimed to be exempt.
deleted text begin Unless the financial institution receives a request for hearing and notice of hearing from
the judgment debtor asserting exemption rights within ten days after receipt of a written
objection to the exemption, deleted text end The funds remain subject to the execution levy as if no claim
of exemption had been made deleted text begin and shall be remitted to the judgment creditor's attorney
within seven days. If a request for hearing and notice of hearing to determine the validity
of a claim of exemption is received by the financial institution within the period provided,
it shall retain the funds claimed to be exempt until otherwise ordered by the court deleted text end . new text begin The
financial institution shall retain the funds claimed to be exempt until it receives: (1) a
written release from either the judgment creditor or judgment debtor; or (2) an order
stating whether the funds are exempt.
new text end

Sec. 5.

Minnesota Statutes 2008, section 571.71, is amended to read:

571.71 GARNISHMENT; WHEN AUTHORIZED.

As an ancillary proceeding to a civil action for the recovery of money, a creditor
may issue a garnishment summons as provided in this chapter against any third party in
the following instances:

(1) at the time the civil action is commenced or at any time after the commencement
of the civil action, but before the entry of a judgment, if the court orders the issuance of
the garnishment summons pursuant to section 571.93; new text begin or
new text end

deleted text begin (2) at any time 40 days or more after service of the summons and complaint upon
the debtor in the civil action when a judgment by default could have, but has not, been
entered pursuant to rule 55.01(a) of the Minnesota Rules of Civil Procedure for the District
Courts. No filing of a pleading or other documents by the creditor is required to issue a
garnishment summons under this clause; however, the creditor must comply with the
service requirement of section 571.72, subdivision 4; or
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end at any time after entry of a money judgment in the civil action.

Sec. 6.

Minnesota Statutes 2008, section 571.72, subdivision 4, is amended to read:

Subd. 4.

Service of garnishment summons on debtor.

A copy of the garnishment
summons and copies of all other papers served on the garnishee must be served by mail at
the last known mailing address of the debtor not later than five days after the service is
made upon the garnishee. deleted text begin The first time a garnishment summons is served on the debtor
pursuant to section 571.71, clause (2), the creditor shall also serve a copy of the affidavit
of service of the original summons and complaint. deleted text end Service of the garnishment documents
on the debtor is effective upon mailing.

Sec. 7.

Minnesota Statutes 2008, section 571.79, is amended to read:

571.79 DISCHARGE OF A GARNISHEE.

Except as provided in paragraph deleted text begin (h) deleted text end new text begin (g) new text end , the garnishee, after disclosure, shall be
discharged of any further retention obligation to the creditor with respect to a specific
garnishment summons when one of the following conditions are met:

(a) The garnishee discloses that the garnishee is not indebted to the debtor or does
not possess any money or other property belonging to the debtor that is attachable as
defined in section 571.73, subdivision 3. The disclosure is conclusive against the creditor
and discharges the garnishee from any further obligation to the creditor other than to retain
all nonexempt disposable earnings, indebtedness, money, and property of the debtor
which was disclosed.

(b) The garnishee discloses that the garnishee is indebted to the debtor as indicated
on the garnishment disclosure form. The disclosure is conclusive against the creditor and
discharges the garnishee from any further obligation to the creditor other than to retain
all nonexempt disposable earnings, indebtedness, money, and property of the debtor
that was disclosed.

deleted text begin (c) If the garnishee was served with a garnishment summons before entry of
judgment against the debtor by the creditor in the civil action and the garnishee has
retained any disposable earnings, indebtedness, money, or property of the debtor, 270 days
after the garnishment summons is served the garnishee is discharged and the garnishee
shall return any disposable earnings, indebtedness, money, and property to the debtor.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end If the garnishee was served with a garnishment summons after entry of
judgment against the debtor by the creditor in the civil action and the garnishee has
retained any disposable earnings, indebtedness, money, or property of the debtor, 180 days
after the garnishment summons is served the garnishee is discharged and the garnishee
shall return any disposable earnings, other indebtedness, money, and property to the debtor.

deleted text begin (e) deleted text end new text begin (d) new text end If the garnished indebtedness, money, or other property is destroyed without
any negligence of the garnishee, the garnishee is discharged of any liability to the creditor
for nondelivery of the garnished indebtedness, money, and other property.

deleted text begin (f) deleted text end new text begin (e) new text end The court may, upon motion of an interested person, discharge the garnishee
as to any disposable earnings, other indebtedness, money, and property in excess of the
amount that may be required to satisfy the creditor's claim.

deleted text begin (g) deleted text end new text begin (f) new text end The discharge of the garnishee pursuant to paragraph (a), (b), new text begin or new text end (c) deleted text begin , or (d) deleted text end
is not determinative of the rights of the creditor, debtor, or garnishee with respect to any
other garnishment summons, even another garnishment summons involving the same
parties, unless and to the extent adjudicated pursuant to the procedures described in
paragraph deleted text begin (h) deleted text end new text begin (g) new text end .

deleted text begin (h) deleted text end new text begin (g) new text end The garnishee is not discharged if within 20 days of the service of the
garnishee's disclosure or the return to the debtor of any disposable earnings, indebtedness
money, or other property of the debtor, whichever is later, an interested person (1) serves
a motion scheduled to be heard within 30 days of the service of the motion relating
to the garnishment, or (2) serves a motion scheduled to be heard within 30 days of the
service of the motion for leave to file a supplemental complaint against the garnishee, as
provided under section 571.75, subdivision 4, and the court upon proper showing vacates
the discharge of the garnishee.

Sec. 8.

Minnesota Statutes 2008, section 571.912, is amended to read:

571.912 FORM OF EXEMPTION NOTICE.

The notice informing a debtor that an order for attachment, garnishment summons,
or levy by execution has been used to attach funds of the debtor to satisfy a claim must be
substantially in the following form:

STATE OF MINNESOTA		DISTRICT COURT
COUNTY OF .		. JUDICIAL DISTRICT
. (Creditor)
. (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. 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), Supplemental Security Income (SSI), and Energy Assistance;

(2) Social Security benefits (Old Age, Survivors, or Disability Insurance);

(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);

(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;

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

(11) all of a debtor's after tax earnings below 40 times the federal minimum wage.

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 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 creditor's
attorney. In the event that there is no attorney for the creditor, then such notice shall be
sent directly to the creditor. The address for the creditor's attorney or the 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 they do 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 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 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 CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:

The institution will hold the money until a court decides if your exemption claim is
valid deleted text begin , 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 deleted text end . 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 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:

(If you claim an exemption complete the following):

(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 eleven 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 creditor's attorney
at the address indicated above.

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

Sec. 9.

Minnesota Statutes 2008, section 571.914, subdivision 1, is amended to read:

Subdivision 1.

Objections.

deleted text begin An objection shall be interposed by mailing or
delivering one copy of the written objection to the financial institution and one copy of the
written objection to the debtor. A Request for Hearing and Notice of Hearing form must
accompany each copy of the written objection.
deleted text end

deleted text begin Both copies of an objection to an exemption claim must be mailed or delivered on
the same date. The financial institution may rely on the date of mailing or delivery of a
notice to it in computing any time periods in this section.
deleted text end

deleted text begin The written objection, and Request for Hearing and Notice of Hearing, must be
substantially in the forms set out in subdivisions 2 and 3.
deleted text end

deleted text begin The court shall provide clerical assistance to help with the writing and filing of a
Request for Hearing by any person not represented by counsel. The court administrator
may charge a fee of $1 for the filing of a Request for Hearing. Upon the filing of a Request
for Hearing, the court administrator shall schedule the matter for hearing no later than five
business days from the date of filing. The court administrator shall immediately send a
completed copy of the request, including the hearing date, time, and place to the adverse
party and to the financial institution by first class mail.
deleted text end

deleted text begin An order stating whether the debtor's funds are exempt shall be issued by the court
within three days of the date of the hearing.
deleted text end

new text begin If a creditor objects to a debtor's exemption claim, the creditor shall obtain from
the court administrator or a designated motion calendar deputy a date and time for an
evidentiary hearing on its objection. The creditor shall serve on the debtor and garnishee,
personally or by first class mail, a notice of hearing on creditor's objection to debtor's
exemption claim in the form specified in subdivision 2, on the same day that it obtains
the hearing date. The hearing date obtained by the creditor must be no earlier than five
business days and no later than ten business days from the date the creditor requests and
obtains the hearing date. An order stating whether the debtor's funds are exempt must be
issued by the court within three days of the date of the hearing.
new text end

Sec. 10.

Minnesota Statutes 2008, section 571.914, subdivision 2, is amended to read:

Subd. 2.

Notice of new text begin hearing on creditor's new text end objection new text begin to debtor's exemption claim new text end .

deleted text begin (a) The written objection to the debtor must be in substantially the following form:
deleted text end

deleted text begin STATE OF MINNESOTA deleted text end		deleted text begin DISTRICT COURT deleted text end
deleted text begin COUNTY OF . deleted text end		deleted text begin . JUDICIAL DISTRICT deleted text end
deleted text begin . (Creditor) deleted text end
deleted text begin . (Debtor) deleted text end		deleted text begin CREDITOR'S OBJECTION deleted text end
deleted text begin . (Garnishee) deleted text end		deleted text begin TO EXEMPTION CLAIM deleted text end

deleted text begin The creditor objects to your claim for exemption from garnishment, levy of
execution, order for attachment (strike inapplicable language) for the following reason(s):
deleted text end

deleted text begin . deleted text end

deleted text begin . deleted text end

deleted text begin . deleted text end

deleted text begin Because of this objection, your financial institution will retain the funds you claimed
to be exempt for an additional ten days. If you wish to request a hearing on your exemption
claim, you need to do so within ten days from the date the objection was personally served
on you, or within 13 days of the date the objection was mailed to you. You may request a
hearing by completing the attached form and filing it with the court administrator.
deleted text end

deleted text begin 1. The court shall provide clerical assistance to help with the writing and filing of a
Request for Hearing by any person not represented by counsel. The court administrator
may charge a fee of $1 for the filing of a Request for Hearing.
deleted text end

deleted text begin 2. Upon the filing of a Request for Hearing, the clerk shall schedule the matter for a
hearing no later than five business days from the date of filing. The court administrator
shall forthwith send a completed copy of the request, including the hearing date, time, and
place to the adverse party and to the financial institution by first class mail.
deleted text end

deleted text begin 3. If it is possible that the financial institution might not receive the request mailed
from the court administrator within ten days, then you may want to personally deliver a
copy of the request to the financial institution after you have filed your request with the
court.
deleted text end

deleted text begin 4. An order stating whether your funds are exempt shall be issued by the court
within three days of the date of the hearing.
deleted text end

deleted text begin If you do not file a Request for Hearing within ten days of the date the objection was
personally served on you, or within 13 days from the date the objection was mailed to you,
your financial institution may turn your funds over to your creditor.
deleted text end

deleted text begin If you file a Request for Hearing and your financial institution receives it within ten
days of the date it received this objection, your financial institution will retain your funds
claimed to be exempt until otherwise ordered by the court, or until the garnishment lapses
pursuant to Minnesota Statutes, section 571.79.
deleted text end

	deleted text begin . deleted text end
	deleted text begin (CREDITOR OR CREDITOR'S ATTORNEY.) deleted text end

new text begin The creditor's notice of hearing on its objection to the debtor's exemption claim
must be in substantially the following form:
new text end

new text begin STATE OF MINNESOTA new text end				new text begin DISTRICT COURT new text end
new text begin COUNTY OF . new text end				new text begin . JUDICIAL DISTRICT new text end
new text begin . new text end	new text begin (Creditor) new text end				new text begin NOTICE OF new text end
new text begin . new text end	new text begin (Debtor) new text end				new text begin HEARING ON new text end
new text begin . new text end	new text begin (Garnishee) (Third Party) new text end			new text begin CREDITOR'S OBJECTION TO DEBTOR'S EXEMPTION CLAIM new text end

new text begin The creditor objects to your claim for exemption from garnishment, levy of
execution, order for attachment (strike inapplicable language) for the following reason(s):
new text end

new text begin . new text end

new text begin . new text end

new text begin . new text end

new text begin A hearing will be held in this case on (Date) at (Time) at (Place) to resolve whether
your funds at (Financial Institution) are exempt. You have claimed that such funds are
exempt because
. new text end

new text begin . new text end

new text begin . new text end

new text begin At the hearing, you will have to prove that your funds are exempt. If you do not
attend the hearing, the judge may order that your funds be released to the judgment
creditor. The judge will issue an order within three days of the hearing regarding whether
your funds are exempt.
new text end

new text begin Because the creditor objected to your exemption claim, your financial institution will
retain the funds you claim to be exempt until it receives: (1) a written release from either
the creditor or you; or (2) an order from the court regarding whether your funds are exempt.
new text end

new text begin Dated: . new text end
	new text begin . new text end
	new text begin Judgment Creditor or Creditor's Attorney new text end
	new text begin . new text end
	new text begin . Address new text end

new text begin (Note to both parties: Bring with you to the hearing all documents and materials relevant
to the exemption claim and objection. Failure to do so could delay the court's decision.)
new text end

Sec. 11.

Minnesota Statutes 2008, section 571.914, subdivision 4, is amended to read:

Subd. 4.

Duties of financial institution if objection is made to exemption claim.

Upon receipt of a written objection from the creditor within the specified seven-day
period, the financial institution shall retain the funds claimed to be exempt. deleted text begin Unless the
financial institution receives a request for hearing from the debtor asserting exemption
rights within ten days after receipt of the written objection to the exemption, deleted text end The funds
remain subject to the garnishment summons as if no claim of exemption had been made.
deleted text begin If a notice of motion and motion to determine the validity of a claim of exemption is
received by the financial institution within the period provided, the financial institution
shall retain the funds claimed to be exempt until otherwise ordered by the court, or until
the garnishment lapses pursuant to section 571.79. deleted text end new text begin The financial institution shall retain the
funds claimed to be exempt until it receives: (1) a written release from either the creditor
or debtor; or (2) an order stating whether the funds are exempt.
new text end

Sec. 12.

Minnesota Statutes 2008, section 571.93, subdivision 1, is amended to read:

Subdivision 1.

Grounds.

The court may order the issuance of a garnishment
summons before judgment deleted text begin or default deleted text end in the civil action, if a summons and complaint, or
copies of these documents, are filed with the appropriate court, and if, upon application to
the court, it appears that any of the following grounds exist:

(1) the debtor has assigned, secreted, or disposed of, or is about to assign, secrete,
or dispose of, any of the debtor's nonexempt property, with intent to delay or defraud
any of debtor's creditors;

(2) the debtor has removed, or is about to remove, any of the debtor's nonexempt
property from this state, with intent to delay or defraud any of debtor's creditors;

(3) the debtor has converted or is about to convert any of the debtor's nonexempt
property into money or credits, for the purpose of placing the property beyond the reach of
any of debtor's creditors;

(4) the debtor has committed an intentional fraud giving rise to the claim upon
which the civil action is brought;

(5) the debtor has committed any act or omission, for which the debtor has been
convicted of a felony, giving rise to the claim upon which the civil action is brought; or

(6) the purpose of the garnishment is to establish quasi in rem jurisdiction and

(i) debtor is a resident individual having left the state with intent to defraud creditors,
or to avoid service; or

(ii) a judgment had previously been obtained in another state consistent with due
process; or

(iii) the claim in the civil action is directly related to and arises from the property
sought to be attached; or

(iv) no forum is available to obtain a personal judgment against the debtor in the
United States or elsewhere; or

(7) the creditor has been unable to serve upon the debtor the summons and
complaint in the civil action because the debtor has been inaccessible due to residence
and employment in a building where access is restricted.

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 551.05, subdivisions 5 and 6; and 571.914,
subdivision 3, new text end new text begin are repealed.
new text end