Office of the Revisor of Statutes
Minnesota Session Laws - 1983, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1983
CHAPTER 235--S.F.No. 769
An act relating to property exempt from attachment,
garnishment, or levy of execution; requiring notice to
judgment debtors prior to delivery of funds owed to
the judgment debtor by any third party to satisfy a
creditor's claim; providing for an exemption notice
within certain time limits; providing penalties for
failure to send the exemption notice; clarification of
certain exempt funds; providing for an increase in the
amount of household goods exempt; amending Minnesota
Statutes 1982, sections 548.15; 550.041; 550.14;
550.141, by adding a subdivision; 550.37, subdivisions
4, 13, 14, 19, 20, and 24, and by adding a
subdivision; 571.41, subdivisions 5 and 6, and by
adding subdivisions; 571.42; and 571.67.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1982, section 548.15, is
amended to read:
548.15 [DISCHARGE OF RECORD.]
Upon the satisfaction of a judgment, whether wholly or in
part, or as to all or any of several defendants, the clerk shall
enter the satisfaction in the judgment roll, and note the same
it, with the its date thereof, on the docket. If the docketing
is upon a transcript from another county, the entry on the
docket shall be sufficient. A judgment shall be deemed
satisfied when there is filed with the clerk:
(1) An execution satisfied, to the extent stated in the
sheriff's return thereon on it;
(2) A certificate of satisfaction signed and acknowledged
by the judgment creditor;
(3) A like certificate signed and acknowledged by the
attorney of the creditor, unless his authority as attorney has
previously been revoked and an entry of the revocation made upon
the register; but the authority of an attorney to satisfy a
judgment shall cease ceases at the end of six years from its
entry;
(4) An order of the court, made on motion, requiring the
execution of a certificate of satisfaction, or directing
satisfaction to be entered without it;
(5) Where a judgment is docketed on transcript, a copy of
either of the foregoing documents, certified by the clerk of the
court in which the judgment was originally entered and in which
the originals were filed.
A satisfaction made in the name of a partnership shall be
is valid if executed by a member thereof of it while the
partnership continues. The judgment creditor, or his attorney
while his authority continues, may also satisfy a judgment of
record by a brief entry on the register, signed by him and dated
and witnessed by the clerk, who shall note the satisfaction on
the margin of the docket. When a judgment is satisfied
otherwise than by return of execution, the judgment creditor or
his attorney shall give a certificate thereof of it within ten
days after the satisfaction.
Sec. 2. Minnesota Statutes 1982, section 550.041, is
amended to read:
550.041 [SUMMARY EXECUTION OF SMALL JUDGMENT DEBTS.]
Subdivision 1. [COVERAGE.] When a judgment creditor
proposes to make execution on a judgment debt of not more than
$2,500 from money owed to the judgment debtor by a third party,
the execution may be made by the attorney for the judgment
creditor or sheriff, or their agents, through a registered or
certified letter or by personal service to the third party
containing a copy of the execution. Upon receipt, the third
party shall remit as much of the amount due under section 550.04
, but not more than $5,000, as his own debt equals to the
sheriff or attorney who shall proceed in all other respects like
the sheriff making a similar execution. No more than $5,000 may
be recovered in an execution pursuant to this section.
Subd. 2. [EXEMPTION NOTICE.] If this section is used to
enforce a judgment against a debtor who is a natural person by
executing on funds of the judgment debtor held on deposit at any
financial institution, the judgment creditor shall serve two
copies of an exemption notice with the copy of the execution.
The notice shall be substantially in the form set out in section
17. Failure of the judgment creditor to send the exemption
notice renders the execution void, and the financial institution
shall take no action. However, if this subdivision is being
used to execute on funds which have previously been garnished in
compliance with section 571.41, the judgment creditor is not
required to serve an additional exemption notice. In that
event, the execution shall only be effective as to the funds
which were subject to the prior garnishment.
Subd. 3. [DUTY OF FINANCIAL INSTITUTION; EXEMPTION;
OBJECTION.] Upon receipt of the execution and exemption notices,
the financial institution shall attach and bind as much of the
amount due under section 550.04 as his own debt equals. Within
two business days after receipt of the judgment creditor's
letter, the financial institution shall serve upon the judgment
debtor two copies of the exemption notice. The exemption notice
shall be served by first class mail to the last known address of
the judgment debtor. If no claim of exemption is received by
the financial institution prior to the expiration of 14 days
after the exemption notices are mailed to the judgment debtor,
the financial institution shall remit as much of the amount due
under section 550.04 as its own debt equals to the sheriff or
attorney who shall proceed in all other respects like the
sheriff making a similar execution. If the judgment debtor
elects to claim an exemption, he shall complete the exemption
notice, affix his signature under penalty of perjury, and
deliver one copy to the financial institution and one copy to
the judgment creditor within 14 days of the date postmarked on
the correspondence mailed to the judgment debtor containing the
exemption notices. Failure of the judgment debtor to serve the
executed exemption notice does not constitute a waiver of any
right he may have to an exemption. Upon timely receipt of a
claim of exemption, the financial institution shall remit as
much of the amount due under section 550.04 as his own debt
equals to the sheriff or attorney from funds not claimed to be
exempt by the judgment debtor. All money claimed to be exempt
shall be released to the judgment debtor upon the expiration of
seven days after the date postmarked on the correspondence
containing the executed exemption notice mailed to the judgment
creditor or the date of personal delivery of the executed
exemption notice to the judgment creditor, unless within that
time a timely objection to the exemption is interposed by the
judgment creditor. Objection is made by mailing or delivering
one copy of a written objection to the claim of exemption to the
financial institution and one copy of the objection to the
judgment debtor. Upon timely receipt of a written objection
from the judgment creditor, the financial institution shall
retain the funds claimed to be exempt. Unless the third party
receives a notice of motion and motion from the judgment debtor
asserting exemption rights within ten days after receipt of the
objection, the financial institution shall remit as much of the
amount due under section 550.04 as his own debt equals to the
sheriff or attorney representing the judgment creditor. Either
the judgment creditor or the judgment debtor may bring a motion
to determine the validity of an exemption claim by following the
procedure set out in section 17. 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, it shall retain the funds claimed to be exempt until
otherwise ordered by a court. However, at any time during the
procedure specified in this subdivision, the judgment debtor or
the judgment creditor may, by a writing dated subsequent to the
service of the execution, direct the financial institution to
release the funds in question to the other party. Upon receipt
of a release, the financial institution shall release the funds
as directed.
Subd. 4. [SUBSEQUENT PROCEEDINGS; BAD FAITH CLAIMS.] If in
subsequent proceedings brought by the judgment debtor or the
judgment creditor, the claim of exemption is not upheld, and the
court finds that it was asserted in bad faith, the judgment
creditor shall be awarded actual damages, costs, and reasonable
attorney fees resulting from the additional proceedings, and an
amount not to exceed $100. If the claim of exemption is upheld,
and the court finds that the judgment creditor disregarded the
claim of exemption in bad faith, the judgment debtor shall be
awarded costs, reasonable attorney fees, actual damages, and an
amount not to exceed $100. The underlying judgment shall be
modified to reflect assessment of damages, costs, and attorney
fees. However, if the party in whose favor a penalty assessment
is made is not actually indebted to his attorney for fees, the
attorney's fee award shall be made directly to the attorney and
an appropriate judgment in favor of the attorney shall be
entered. Upon motion of any party in interest, on notice, the
court shall determine the validity of any claim of exemption and
may make any order necessary to protect the rights of those
interested. No financial institution shall be liable for
damages for complying with this section. Both copies of an
exemption claim or 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.
Subd. 5. [COSTS; SATISFACTION.] The attorney shall be
allowed no costs from any party other than the judgment creditor
for execution in accordance with this section. The attorney or
judgment creditor making such the execution shall endorse
thereon on it partial satisfaction by amount or the total
satisfaction and return the original execution to the clerk of
that court, within ten days after the satisfaction, for filing
without charge.
Sec. 3. Minnesota Statutes 1982, section 550.14, is
amended to read:
550.14 [LEVY ON OTHER PERSONAL PROPERTY.]
Subdivision 1. [PROPERTY COVERED.] Other personal property
shall be levied on by leaving a certified copy of the execution,
and a notice specifying the property levied on, with the person
holding the same it; or, if a debt, with the debtor; or, if
stock or an interest in stock of a corporation, with the
president, secretary, treasurer, cashier, or managing agent
thereof of it.
Subd. 2. [EXEMPTION NOTICE.] If this section is used to
enforce a judgment against a judgment debtor who is a natural
person by executing on funds of the judgment debtor held on
deposit at any financial institution, the judgment creditor
shall cause to be served with the execution two copies of an
exemption notice. The notice shall be substantially in the form
set out in section 17. If the judgment creditor fails to supply
the exemption notice to the sheriff, the sheriff shall take no
action. Failure of the sheriff to serve the exemption notice
shall render the execution void, and the financial institution
shall take no action. However, if this subdivision is being
used to execute on funds which have previously been garnished in
compliance with section 571.41, the judgment creditor shall not
be required to serve an additional exemption notice. In that
event, the execution shall only be effective as to the funds
which were subject to the prior garnishment.
Subd. 3. [DUTY OF FINANCIAL INSTITUTION; EXEMPTION;
OBJECTION.] Upon receipt of the execution and exemption notices,
the financial institution shall attach and bind as much of the
amount due under section 550.04 as his own debt equals. Within
two business days after receipt of the judgment creditor's
execution of the execution and exemption notices, the financial
institution shall serve upon the judgment debtor two copies of
the exemption notice. The exemption notice shall be served by
first class mail to the last known address of the judgment
debtor. If no claim of exemption is received by the financial
institution within 14 days after the exemption notices are
mailed to the judgment debtor, the financial institution shall
remit as much of the amount due under section 550.04 as its own
debt equals to the sheriff. If the judgment debtor elects to
claim an exemption, he shall complete the exemption notice,
affix his signature under penalty of perjury, and deliver one
copy to the financial institution and one copy to the judgment
creditor within 14 days of the date postmarked on the
correspondence mailed to the judgment debtor containing the
exemption notices. Failure of the judgment debtor to serve the
executed exemption notice does not constitute a waiver of any
right he may have to an exemption. Upon timely receipt of a
claim of exemption, the financial institution shall remit as
much of the amount due under section 550.04 as his own debt
equals to the sheriff from funds not claimed to be exempt by the
judgment debtor. All money claimed to be exempt shall be
released to the judgment debtor upon the expiration of seven
days after the date postmarked on the correspondence containing
the executed exemption notice mailed to the judgment creditor,
or the date of personal delivery of the executed exemption
notice to the judgment creditor, unless within that time a
written objection to the claim of exemption is interposed by the
judgment creditor. Objection is made by mailing or delivering
one copy of the objection to the financial institution, and one
copy to the judgment debtor. Upon timely receipt of a written
objection from the judgment creditor, the financial institution
shall retain the funds claimed to be exempt. Unless the
financial institution receives a notice of motion and motion
from the judgment debtor asserting an exemption within ten days
after receipt of the objection, the financial institution shall
remit as much of the amount due under section 550.04 as its own
debt equals to the sheriff. Either the judgment creditor or the
judgment debtor may bring a motion to determine the validity of
an exemption claim by following the procedure set out in section
17. 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. However, at any time during the procedure specified
in this subdivision, the judgment debtor or the judgment
creditor may, by a writing dated subsequent to the service of
the execution, direct the financial institution to release the
funds in question to the other party. Upon receipt of a
release, the financial institution shall release the funds as
directed.
Subd. 4. [SUBSEQUENT PROCEEDINGS.] If in subsequent
proceedings brought by the judgment debtor or the judgment
creditor, the claim of exemption is not upheld, and the court
finds that it was asserted in bad faith, the judgment creditor
shall be awarded actual damages, costs, and reasonable attorney
fees resulting from the additional proceedings and an amount not
to exceed $100. If the claim of exemption is upheld, and the
court finds that the judgment creditor disregarded the claim of
exemption in bad faith, the judgment debtor shall be awarded
costs, reasonable attorney fees, actual damages, and an amount
not to exceed $100. The underlying judgment shall be modified
to reflect assessment of damages, costs, and attorney fees.
However, if the party in whose favor a penalty assessment is
made is not actually indebted to his attorney for fees, the
attorney's fee award shall be made directly to the attorney and
an appropriate judgment in favor of the attorney shall be
entered. Upon motion of any party in interest, on notice, the
court shall determine the validity of any claim of exemption and
may make any order necessary to protect the rights of those
interested. No financial institution shall be liable for
damages for complying with this section. Both copies of an
exemption claim or 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.
Sec. 4. Minnesota Statutes 1982, section 550.141, is
amended by adding a subdivision to read:
Subd. 3. [SERVICE OF EXECUTION.] If the execution has not
been served within one year after service of the notice, the
judgment creditor shall serve another notice upon the judgment
debtor prior to serving the execution on his employer. If more
than one year has passed since the most recent execution, the
judgment creditor shall serve another notice upon the judgment
debtor no less than ten days prior to service of a subsequent
execution on his employer.
Sec. 5. Minnesota Statutes 1982, section 550.37,
subdivision 4, is amended to read:
Subd. 4. [PERSONAL GOODS.] (a) All wearing apparel, one
watch, utensils, and foodstuffs of the debtor and his family;
and (b) household furniture, household appliances, phonographs,
radio and television receivers of the debtor and his family, not
exceeding $3,000 $4,500 in value. The exemption provided by
this subdivision may not be waived except with regard to
purchase money security interests. Except for a pawnbroker's
possessory lien, a nonpurchase money security interest in the
property exempt under this subdivision is void.
Provided however, If a debtor has property of the type
which would qualify for the exemption under clause (b) of this
subdivision, of a value in excess of $3,000 $4,500 an itemized
list of the exempt property, together with the value of each
item listed, shall be attached to the security agreement at the
time a security interest is taken, and a creditor may take a
nonpurchase money security interest in the excess over $3,000
$4,500 by requiring the debtor to select his exemption in
writing at the time the loan is made.
Sec. 6. Minnesota Statutes 1982, section 550.37, is
amended by adding a subdivision to read:
Subd. 4a. [ADJUSTMENT OF DOLLAR AMOUNTS.] (a) The dollar
amounts in subdivision 4 shall change periodically as provided
in this subdivision to the extent of changes in the implicit
price deflator for the gross national product, 1972 = 100,
compiled by the United States department of commerce, and
hereafter referred to as the index. The index for December,
1982, is the reference base index.
(b) The designated dollar amounts shall change on July 1 of
each-even numbered year if the percentage of change, calculated
to the nearest whole percentage point, between the index for
December of the preceding year and the reference base index is
ten percent or more. The portion of the percentage change in
the index in excess of a multiple of ten percent shall be
disregarded and the dollar amounts shall change only in
multiples of ten percent of the amounts stated in subdivision 4.
(c) If the index is revised, the percentage of change
pursuant to this section shall be calculated on the basis of the
revised index. If a revision of the index changes the reference
base index, a revised reference base index shall be determined
by multiplying the reference base index then applicable by the
rebasing factor furnished by the department of commerce. If the
index is superseded, the index referred to in this section is
the one represented by the department of commerce as reflecting
most accurately changes in the purchasing power of the dollar
for consumers.
(d) The commissioner of banks shall announce and publish:
(1) on or before April 30 of each year in which dollar
amounts are to change, the changes in dollar amounts required by
paragraph (b); and
(2) promptly after the changes occur, changes in the index
required by paragraph (c) including, if applicable, the
numerical equivalent of the reference base index under a revised
reference base index and the designation or title of any index
superseding the index.
(e) A person does not violate this chapter with respect to
a transaction otherwise complying with this chapter if he relies
on dollar amounts either determined according to paragraph (b)
or appearing in the last publication of the commissioner
announcing the then current dollar amounts.
Sec. 7. Minnesota Statutes 1982, section 550.37,
subdivision 13, is amended to read:
Subd. 13. [WAGES.] All wages not subject to garnishment by
the provisions of section 571.55. A subsequent attachment,
garnishment or levy of execution shall impound only that pay
period's nonexempt disposable earnings not subject to a prior
attachment, garnishment or levy of execution, but in no instance
shall more than an individual's total nonexempt disposable
earnings in that pay period be subject to attachment,
garnishment or levy of execution. Garnishments shall impound
the nonexempt disposable earnings in the order of their service
upon the employer. The disposable earnings exempt from
garnishment are exempt as a matter of right, whether claimed or
not by the person to whom due. Such The exemptions may not be
waived. Such The exempt disposable earnings are payable by the
employer when due. Such The exempt disposable earnings shall
also be exempt for 20 days after deposit in any financial
institution, whether in a single or joint account. This 20-day
exemption shall also apply applies to any contractual set-off or
security interest asserted by a financial institution in which
said the earnings are deposited by the individual. In tracing
said the funds, the first-in first-out method of accounting
shall be used. The burden of establishing that funds are exempt
rests upon the debtor. As used in this section, the term
"financial institution" shall include includes credit unions.
Nothing in this paragraph shall be construed to void or
supersede any valid assignment of wages or transfer of funds
held on account made prior to the attachment, garnishment, or
levy of execution.
Sec. 8. Minnesota Statutes 1982, section 550.37,
subdivision 14, is amended to read:
Subd. 14. [PUBLIC ASSISTANCE.] All relief based on need,
and the wages or salary of a person who is a recipient of relief
based on need, shall be exempt from all claims of creditors
including any contractual set-off or security interest asserted
by a financial institution. For the purposes of this chapter,
relief based on need shall include includes AFDC, general
assistance medical care, supplemental security income, medical
assistance, Minnesota supplemental assistance, and general
assistance. The salary or wages of any debtor who is or has
been a recipient of relief based on need, or an inmate of a
correctional institution shall, upon his return to private
employment after having been a recipient of relief based on
need, or an inmate of a correctional institution, be exempt from
attachment, garnishment, or levy of execution for a period of
six months after his return to employment and after all public
assistance has been terminated. He may take advantage of such
six months salary or wage exemption provisions only once in
every three years. The exemption provisions contained in this
subdivision shall also apply for 60 days after deposit in any
financial institution, whether in a single or joint account. In
tracing said the funds, the first-in first-out method of
accounting shall be used. The burden of establishing that funds
are exempt rests upon the debtor. Agencies distributing relief
and the correctional institutions shall, at the request of
creditors, inform them whether or not any debtor has been a
recipient of relief based on need, or an inmate of a
correctional institution, within such period of the preceding
six months.
Sec. 9. Minnesota Statutes 1982, section 550.37,
subdivision 19, is amended to read:
Subd. 19. [WAIVER.] The exemption of the property listed
in subdivisions 2, 3, and 5 to 11, and 12a may not be waived
except by a statement in substantially the following form, in
bold face type of a minimum size of 12 points, signed and dated
by the debtor at the time of the execution of the contract
surrendering the exemption, immediately adjacent to the listing
of the property: "I understand that some or all of the above
property is normally protected by law from the claims of
creditors, and I voluntarily give up my right to that protection
for the above listed property with respect to claims arising out
of this contract."
Sec. 10. Minnesota Statutes 1982, section 550.37,
subdivision 20, is amended to read:
Subd. 20. [TRACEABLE FUNDS.] The exemption of funds from
creditors' claims, provided by subdivisions 9, 10, 11, and 15,
and 24, shall not be affected by the subsequent deposit of said
the funds in a bank or any other financial institution, whether
in a single or joint account, so long as said if the funds can
be are traceable to their exempt source. In tracing said the
funds, the first-in first-out method of accounting shall be used.
The burden of establishing that funds are exempt rests upon the
debtor. No bank or other financial institution shall be liable
for damages for complying with process duly issued out of any
court for the collection of a debt even if the funds affected by
said the process are subsequently determined to have been exempt.
Sec. 11. Minnesota Statutes 1982, section 550.37,
subdivision 24, is amended to read:
Subd. 24. [EMPLOYEE BENEFITS.] The debtor's right to
receive a payment, or payments received by the debtor, under a
stock bonus, pension, profit sharing, annuity, or similar plan
or contract on account of illness, disability, death, age, or
length of service, to the extent reasonably necessary for the
support of the debtor and any dependent of the debtor.
Sec. 12. Minnesota Statutes 1982, section 571.41,
subdivision 5, is amended to read:
Subd. 5. [PRIOR NOTICE REQUIRED.] If the garnishee summons
is to be used to garnish the earnings of an individual to
enforce a judgment, or to garnish earnings prior to entry of
judgment pursuant to subdivision 2, clause (a), prior to the
first garnishment on any debt, the creditor shall serve upon the
debtor, no less than ten days prior to the service of the
garnishee summons, a notice that such a summons may be issued.
If the garnishee summons has not been served within one year
after service of the notice, the judgment creditor shall serve
another notice upon the judgment debtor prior to serving the
garnishee summons on his employer. If more than one year has
passed since service of the judgment creditor's most recent
garnishee summons, the judgment creditor shall no less than ten
days prior to service of a subsequent garnishee summons serve
notice that another garnishee summons may be served. Said The
notice shall (1) be substantially in the form set out in this
chapter. Said notice shall; (2) be served personally, in the
manner of a summons and complaint, or by first class mail to the
last known address of the debtor. Said notice shall; (3) inform
the debtor that a garnishee summons may be served on the
debtor's employer in ten days, and that the debtor may, within
that time, cause to be served on the creditor a signed statement
under penalties of perjury asserting an entitlement to an
exemption from garnishment. Said notice shall further; (4)
inform the debtor of the wage garnishment exemptions contained
in section 550.37, subdivision 14. Said notice shall further;
and (5) advise the debtor of the relief set forth in this
chapter to which he may be entitled if a creditor in bad faith
disregards a valid claim and the fee, costs, and penalty which
may be assessed against a debtor who in bad faith falsely claims
an exemption or in bad faith takes action to frustrate the
garnishment process. If no statement of exemption is received
by the creditor within ten days from the service of the notice,
he may proceed with the garnishment. Failure of the debtor to
serve such a statement shall does not constitute a waiver of any
right he may have to an exemption. If said the statement of
exemption is received by the creditor, he may still cause a
garnishee summons to be issued; however,. If the debtor
subsequently asserts his claim of exemption successfully to the
court having jurisdiction over the action, and the court finds
that the creditor disregarded the claim of exemption in bad
faith, the debtor shall be entitled to costs, reasonable
attorney fees, actual damages, and an amount not to exceed $100.
If in subsequent proceedings which may be brought by the debtor
or creditor, the claim is not upheld, and the court finds that
it was asserted in bad faith, or if the court finds that the
debtor has in bad faith taken action to frustrate the
garnishment process, the debtor shall be assessed costs and
reasonable attorney fees resulting from said the additional
proceedings, and an amount not to exceed $100.
Sec. 13. Minnesota Statutes 1982, section 571.41, is
amended by adding a subdivision to read:
Subd. 5a. [EXEMPTION NOTICE.] If the garnishee summons is
used to garnish funds of a judgment debtor who is a natural
person and if the funds to be garnished are held on deposit at
any financial institution, the judgment creditor shall serve
with the garnishee summons two copies of an exemption notice.
The notice shall be substantially in the form set out in section
17. Failure of the judgment creditor to send the exemption
notice shall render the garnishment void, and the financial
institution shall take no action.
Sec. 14. Minnesota Statutes 1982, section 571.41, is
amended by adding a subdivision to read:
Subd. 5b. [DUTY OF FINANCIAL INSTITUTION; EXEMPTION;
OBJECTION.] Upon receipt of the garnishee summons and exemption
notices, the financial institution shall attach and bind as much
of the amount due under section 571.471 as the financial
institution has on deposit owing to the judgment debtor. Within
two business days after receipt of the garnishee summons and
exemption notices, the financial institution shall serve upon
the judgment debtor two copies of the exemption notice. The
financial institution shall serve the notice by first class mail
to the last known address of the judgment debtor. If no claim
of exemption is received by the financial institution within 14
days after the exemption notices are mailed to the judgment
debtor, the funds shall remain subject to the garnishment
summons. If the judgment debtor elects to claim an exemption,
he shall complete the exemption notice, affix his signature
under penalty of perjury, and deliver one copy to the financial
institution and one copy to the judgment creditor within 14 days
of the date postmarked on the correspondence mailed to the
judgment debtor containing the exemption notices. Failure of
the judgment debtor to serve the executed exemption notice does
not constitute a waiver of any right he may have to an
exemption. Upon timely receipt of a claim of exemption, funds
not claimed to be exempt by the judgment debtor shall remain
subject to the garnishment summons. All money claimed to be
exempt shall be released to the judgment debtor upon the
expiration of seven days after the date postmarked on the
correspondence containing the executed exemption notice mailed
to the judgment creditor, or the date of personal delivery of
the executed exemption notice to the judgment creditor, unless
within that time the judgment creditor interposes an objection
to the exemption. 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 creditor. 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. Unless the financial institution receives a notice of
motion and motion from the judgment debtor asserting exemption
rights within ten days after receipt of the written exemption,
the funds shall remain subject to the garnishment summons as if
no claim of exemption has been made. Either the judgment
creditor or the judgment debtor may bring a motion to determine
the validity of an exemption claim by following the procedure
set out in section 17. 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 571.69. However, at any
time during the procedure specified in this subdivision, the
judgment debtor or the judgment creditor may, by a writing dated
subsequent to the service of the execution, direct the financial
institution to release the funds in question to the other
party. Upon receipt of a release, the financial institution
shall release the funds as directed.
Sec. 15. Minnesota Statutes 1982, section 571.41, is
amended by adding a subdivision to read:
Subd. 5c. [SUBSEQUENT PROCEEDINGS; BAD FAITH CLAIMS.] If
in subsequent proceedings brought by the judgment debtor or the
judgment creditor, the claim of exemption is not upheld, and the
court finds that it was asserted in bad faith, the judgment
creditor shall be awarded actual damages, costs, and reasonable
attorney fees resulting from the additional proceedings and an
amount not to exceed $100. If the claim of exemption is upheld,
and the court finds that the judgment creditor disregarded the
claim of exemption in bad faith, the judgment debtor shall be
awarded costs, reasonable attorney fees, actual damages, and an
amount not to exceed $100. The underlying judgment shall be
modified to reflect assessment of damages, costs, and attorney
fees. However, if the party in whose favor a penalty assessment
is made is not actually indebted to his attorney for fees, the
attorney's fee award shall be made directly to the attorney and
an appropriate judgment in favor of the attorney shall be
entered. Upon motion of any party in interest, on notice, the
court shall determine the validity of any claim of exemption and
may make any order necessary to protect the rights of those
interested. No garnishee shall be liable for damages for
complying with this section. Both copies of an exemption claim
or 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.
Sec. 16. Minnesota Statutes 1982, section 571.41,
subdivision 6, is amended to read:
Subd. 6. [FORM OF NOTICE.] The ten day notice informing a
judgment debtor that a garnishee summons may be used to garnish
the wages of an individual to enforce a judgment, shall be
substantially in the following form:
STATE OF MINNESOTA)
) ss
County of ) ............ Court
...................................... (Judgment Creditor)
...................................... (Judgment Debtor)
Garnishment Exemption Notice
The State of Minnesota
To the above named Judgment Debtor:
Please take notice that a Garnishment Summons may be served
upon your employer, without any further court proceedings or
notice to you, ten days or more from the date hereof. Your
wages may be exempted are completely exempt from garnishment if
you are now a recipient of relief based on need, if you have
been a recipient of such relief within the last six months, or
if you have been an inmate of a correctional institution in the
last six months. Relief based on need includes, only AFDC,
general assistance medical care, supplemental security income,
medical assistance, Minnesota supplemental assistance, and
general assistance. It does not include Social Security,
unemployment compensation, food stamps, or workers' compensation.
If you wish to claim such an exemption, you should fill out
the appropriate form below, sign it, and send it to the judgment
creditor's attorney and the garnishee.
You may wish to contact the attorney for the Judgment
Creditor in order to arrange for a settlement of the debt.
PENALTIES
1. Be advised that even if you claim an exemption, a
Garnishment Summons may still be served on your employer. If
your wages are garnished after you claim an exemption, you may
petition the court for a determination of your exemption. If
the court finds that the creditor disregarded your claim of
exemption in bad faith, you will be entitled to costs,
reasonable attorney fees, actual damages, and an amount not to
exceed $100.
2. HOWEVER, BE WARNED if you claim an exemption, the
creditor can also petition the court for a determination of your
exemption, and if the court finds that you claimed an exemption
in bad faith, you will be assessed costs and reasonable
attorney's fees plus an amount not to exceed $100.
3. If after receipt of this notice, you in bad faith take
action to frustrate the garnishment, thus requiring the creditor
to petition the court to resolve the problem, you will be liable
to the creditor for costs and reasonable attorney fees plus an
amount not to exceed $100.
Dated: .......... ................................
(Attorney for) Judgment Creditor
Address
Telephone
I hereby claim under penalty of perjury that my wages are
exempt from garnishment because:
(1) ...... I am presently a recipient of relief based on
need. (Specify the program, case number, and the county from
which relief is being received. There is no limit to the number
of times this exemption may be claimed.)
........... ......................... .........
Program Case Number (if known) County
(2) ...... I am not now receiving relief based on need, but
I have received relief based on need within the last six
months. (Specify the program, case number, and the county from
which relief has been received.) I am aware that I am not
permitted by law to use this exemption for more than one six
month period every three years, and that I may be penalized if I
violate this law.
........... ......................... ..........
Program Case Number (if known) County
(3) ...... I have been an inmate of a correctional
institution within the last six months, and I have not claimed
this exemption within the last three years. (Specify the
correctional institution and location.)
............................ ............
Correctional Institution Location
I hereby authorize any agency that has distributed relief
to me or any correctional institution wherein in which I was an
inmate to disclose to the above-named creditor or his attorney
whether or not I was a recipient of relief based on need or an
inmate of a correctional institution within the last six months.
.....................
Judgment Debtor
Address
Sec. 17. Minnesota Statutes 1982, section 571.41, is
amended by adding a subdivision to read:
Subd. 7. [FORM OF EXEMPTION NOTICE.] The notice informing
a judgment debtor that a writ of attachment, garnishee summons,
or levy of execution has been used to attach and bind funds of
the judgment debtor to satisfy a claim shall be substantially in
the following form:
EXEMPTION NOTICE
STATE OF MINNESOTA
COUNTY OF ......................Court
............................................(Judgment Creditor)
..............................................(Judgment Debtor)
To..................(Judgment Debtor):
A writ of attachment, garnishee 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, 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 AFDC, Medical
Assistance, Supplemental Security Income (SSI), Minnesota
Supplemental Assistance, General Assistance, and General
Assistance Medical Care.
(2) Social Security benefits (Old Age, Survivors, or
Disability Insurance).
(3) Unemployment compensation, workers' compensation, or
veteran's benefits.
(4) An accident, disability, or retirement pension or
annuity.
(5) Life insurance proceeds, or the earnings of your minor
child.
(6) 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:
(7) All wages of a person in category (1).
(8) All wages 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.
(9) Seventy-five percent of every wage earner's after tax
earnings.
(10) All of a wage earner's after tax earnings below 40
times the federal minimum wage (this equals $134 for a 40-hour
week).
TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:
Categories (9) and (10): 20 days.
Categories (7) and (8): 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 this
exemption claim form to the institution which sent you this
notice, and one copy to the judgment creditor. Both copies must
be mailed or delivered on the same day.
If they don't 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 frozen 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:
(1) 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 10 DAYS after the objection is mailed or
given 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 frozen, 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 clerk 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.
...................... ................................
Date (Attorney for) Judgment Creditor
Address
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 ten 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: ................ .)
Dated: ............... ...........................
Judgment Debtor
Address
Sec. 18. Minnesota Statutes 1982, section 571.41, is
amended by adding a subdivision to read:
Subd. 7. [FORM OF MOTION.] (1) A motion to determine the
validity of an exemption claim may be brought by either the
judgment creditor or the judgment debtor by filing with the
clerk of court out of which the attachment, garnishment, or
execution issued a Request for Hearing which shall be in
substantially the following form:
STATE OF MINNESOTA .................. COURT
COUNTY OF .................. ........................
...........................,
Plaintiff(s), REQUEST FOR HEARING ON
v. EXEMPTION CLAIM
...........................,
Defendant(s).
I hereby request a hearing to resolve the exemption claim
which has been made in this case regarding funds in the account
of ....(Debtor)....... at the ......................(Financial
Institution)............ . I believe the property being held is
(not) exempt because ..........................................
...............................................................
...............................................................
DATED: .................. .............................
Judgment (Debtor, Creditor)
.............................
Address
.............................
Hearing date: ......................... Time: .................
Place: .........................................................
(Note to both parties: Bring with you to the hearing all
documents and materials relevant to the exemption claim. Failure
to do so could delay the court's decision.)
(2) The court shall provide Request for Hearing forms and
clerical assistance to help with the writing and filing of a
Request for Hearing by any person not represented by counsel.
The clerk may charge a fee of $1.00 for the filing of a Request
for Hearing.
(3) 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 clerk 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.
Sec. 19. Minnesota Statutes 1982, section 571.42, is
amended to read:
571.42 [EFFECT OF SERVICE OF SUMMONS.]
Subdivision 1. [ATTACH FOR JUDGMENT.] Except as provided
in sections 571.43 and 571.50, service of the garnishee summons
upon the garnishee shall attach and bind, to respond to final
judgment in the action, all personal property of the judgment
debtor in his possession or under his control and all
indebtedness owing by him to the judgment debtor at the time of
such service and all nonexempt disposable earnings earned or to
be earned within that one pay period and within 30 days
thereafter.
Subd. 2. [PROPERTY ATTACHED.] Subject to the provisions of
sections 550.37 and 571.55 all moneys, all nonexempt disposable
earnings earned or to be earned within that one pay period and
within 30 days thereafter and other personal property including
such property of any kind due from or in the hands of an
executor, administrator, receiver or trustee and all written
evidences of indebtedness whether negotiable or not or under or
overdue may be attached by garnishment, and money or any other
thing due or belonging to the judgment debtor may be attached by
this process before it has become payable if its payment or
delivery does not depend upon any contingency, but the garnishee
shall not be compelled to pay or deliver the same it before the
time appointed by the contract.
Sec. 20. Minnesota Statutes 1982, section 571.67, is
amended to read:
571.67 [PENALTY IN CERTAIN GARNISHMENT PROCEEDINGS.]
A party who serves or causes to be served a garnishment
summons prior to judgment in the main action, except where
garnishment prior to entry of judgment is permitted, is liable
to the debtor named in the garnishment proceedings in the amount
of $100 plus reasonable attorneys fees and costs. Action by a
judgment creditor in violation of section 550.041, 550.14,
550.141, or 571.41, causing any third party or garnishee in
possession of funds owing to the judgment debtor to hold or
deliver the funds to satisfy a garnishment, attachment, or levy
of execution shall render the garnishment, attachment, or levy
of execution void and the judgment creditor liable to the
judgment debtor named in the garnishment, attachment, or
execution in the amount of $100, actual damages, and reasonable
attorney fees and costs.
Approved June 1, 1983
Official Publication of the State of Minnesota
Revisor of Statutes