Minnesota Debt Collection: Garnishing Funds at a Financial Institution

Once you have a judgment against a debtor, and know the debtor’s assets, you still have to collect on your judgment. One way to do that is to garnish funds the debtor has at a bank or other financial institution.

The Garnishment Procedure: Step 1 – The Summons

If the debtor has funds at a financial institution, you may serve a Garnishment Summons and Disclosure Form upon the financial institution along with an Important Notice, Instructions, and two copies of an Exemption Form.

When serving the debtor’s employer with a Garnishment Summons, you must also pay the debtor’s employer $15.00, pursuant to Minnesota Statute 571.76.

When the financial institution receives these documents along with the Garnishment Summons, the financial institution must retain as much of the amount owed as the financial institution has on deposit owing to the debtor, but not more than 110% of your claim.

The Garnishment Summons must also include the full name of the debtor and the debtor’s last known mailing address, the remaining unpaid balance of the debt owed, and the date of entry of judgment, pursuant to Minnesota Statute 571.72 subdiv. 2.

You must also add the language, “This is an attempt to collect a debt. Any information obtained will be used for that purpose,” pursuant to the Fair Debt Collection Practices Act requirements under section 332.37(12).

The Garnishment Procedure: Step 2 – Notices

You must mail to the debtor a copy of the Garnishment Summons and anything else that you served on the debtor’s bank, within 5 days of service on the bank.

You must also serve the debtor with a Notice to Debtor in no less than 14-point font.

The Garnishment Procedure: Step 3 – Wait for Exempt Claims

The debtor has 14 days to notify the financial institution and the creditor (you) of any claim for exempt property he or she wishes to assert.

If the financial institution does not receive any such notification within 14 days, the debtor’s funds at the financial institution remain subject to garnishment.

The Garnishment Procedure: Step 4 – The Levy

To obtain these funds, execute by direct levy using a Writ of Execution pursuant to Minnesota Statutes chapter 550.

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