Author Topic: What exactly does "action to frustrate the garnishment" mean?  (Read 610 times)

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ironfist

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What exactly does "action to frustrate the garnishment" mean?
« on: November 27, 2016 08:14:42 AM »
I'm in Minnesota and my wife has a judgment against her for $5k. Despite the fact that I've been telling her to clean out her bank account (we don't have a joint account) for the past few months, she's been lazy and has not done so. Anyway, she just received notice of intent to garnish earnings - it specifically mentions an employer. I'm guessing that her bank account may already be frozen and if so, it's her fault for not acting sooner. However, she doesn't bank at one of the "big banks" and uses a little yokel credit union out of town.

Anyway, the intent to garnish letter (giving the debtor 10 days to claim exemptions... she has none) cites MN Statute 571.924: https://www.revisor.mn.gov/statutes/?id=571.924&format=pdf

It states, in part, that "[the creditor must] advise the debtor of the relief set forth in this chapter to which the debtor may be entitled if a creditor in bad faith disregards a valid claim and the fee, costs, and​ penalty that 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."

What exactly does that entail? A google search has yielded nothing, and it doesn't seem that it's often used against debtors. Since my wife recently left her job and is currently unemployed, they won't get anything from her (former) employer. If she cleans out her bank account before they find it, is that "frustrating the garnishment process"?

It doesn't seem like it to me. What, exactly, constitutes bad faith action to frustrate a garnishment and how often to creditors use it?

11181986

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Re: What exactly does "action to frustrate the garnishment" mean?
« Reply #1 on: November 27, 2016 11:54:04 AM »
only way to know for sure is to find cases where that's been an issue and see how a court has ruled. I do not have access to Minnesota on westlaw or I'd take a look.

CleaningUp

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Re: What exactly does "action to frustrate the garnishment" mean?
« Reply #2 on: November 27, 2016 03:15:53 PM »

only way to know for sure is to find cases where that's been an issue and see how a court has ruled. I do not have access to Minnesota on westlaw or I'd take a look.


Try Google and Google Scholar...It's pretty much all there, statutes AND case law.


For a budding little lawyer, you're not showing much in the way of ingenuity, 11181986

Clydesmom66

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Re: What exactly does "action to frustrate the garnishment" mean?
« Reply #3 on: November 27, 2016 03:27:45 PM »
It states, in part, that "[the creditor must] advise the debtor of the relief set forth in this chapter to which the debtor may be entitled if a creditor in bad faith disregards a valid claim and the fee, costs, and​ penalty that 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."

What exactly does that entail? A google search has yielded nothing, and it doesn't seem that it's often used against debtors. Since my wife recently left her job and is currently unemployed, they won't get anything from her (former) employer. If she cleans out her bank account before they find it, is that "frustrating the garnishment process"?

It doesn't seem like it to me. What, exactly, constitutes bad faith action to frustrate a garnishment and how often to creditors use it?

While the other 2 posters fight with each other trying to prove who is the most ignorant I will answer your question:

"Frustrating" the garnishment process would be deliberately taking actions to keep a creditor from collecting such as misrepresenting your income, employment status, claiming exemptions not legally entitled to.  Examples would be claiming you are on disability SSDI when you are not.  Claiming you earn less than you actually do placing you below the poverty line which would prohibit garnishing wages.  etc.

It appears that the creditor in this case is simply going to go after your wife's wages before she ever gets them.  Absent an exemption (which you said she doesn't have) they can take up to 25% of her wages after taxes and deductions.  It will be removed by her employer before she ever gets her paycheck.  They just don't realize she is unemployed yet.  When creditors have an active wage garnishment in place they rarely go after a bank account as well but she would be wise to clean that bank account out because once they figure out she has no paycheck they will start looking for bank accounts.  Since she is unemployed they will get nothing so that makes it even more important to clean that account out and have a good reason for doing so.  i.e. bills

Technically emptying the account could be seen as an attempt to hide assets but she could claim she got bills paid before they started taking her salary and the court would likely believe it unless she emptied out thousands of dollars that would have satisfied the judgment.

Minnesota is simply using fancy language to describe when a debtor deliberately tries to hide assets or misrepresent their financial status in order to keep the creditor from collecting on a valid judgment.
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

Flyingifr

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Re: What exactly does "action to frustrate the garnishment" mean?
« Reply #4 on: November 27, 2016 04:15:46 PM »
Absent the actions described above which involve lies, I would contend that a debtor has a patriotic duty to frustrate garnishments. One can frustrate garnishments in legal ways, however.

The Federal garnishment law allows a judgment creditor to take 25% of the "NET" income - meaning after tax and other legally required deductions and called "Disposable Earnings" in the law, so long as the net pay does not go below 30 times the Federal Minimum Wage (currently $7.25 per hour, making the floor for garnishment Disposable Earnings of $217.50 per week).

https://www.dol.gov/whd/regs/compliance/whdfs30.pdf

If a debtor's Disposable earnings are just a little above the $217.50 a week, you could consider changing the withholdings so that the Disposable Income falls below $217.50 a week. Yes, you will get less in your paycheck but unless you also owe the IRS or State, the Governments will refund the excess taken out of your pay when you file your tax return. No Judgment Creditor will refund a penny.

If you are in a field of work where you can easily find other employment, you can simply quit your job and work somewhere else. Now the Judgment Creditor cannot get a penny because you have no earnings (disposable or otherwise) from the employer they served the Garnishment Order on. Unless you are served with an Information Subpoena you are under no obligation to tell them where your new job is - it is their problem to find it.

Of course, there is always the skip option - just pack up and leave town and leave no forwarding address. While rather extreme, sometimes extreme times call for extreme measures. Now your creditor has the problem of not only finding where you work, but of also finding where you ARE. I cover this option in the Flyingifr Method - Frustrating the Skip Tracer.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

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ironfist

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Re: What exactly does "action to frustrate the garnishment" mean?
« Reply #5 on: November 27, 2016 05:46:42 PM »
Thanks everyone! Also, thank you to Flyingifr for your informative posts on becoming judgment proof and frustrating the skip tracer. Donation incoming.

Right now we're in a pretty good situation. I bought our house before our marriage (Minnesota is not a community property state anyway, so as long as it's in my name it wouldn't matter). We have two cars, a decent Corolla and a POS beater, both in my name. She has no attachable assets outside of her bank account right now, but I'm planning to have her funds (if she can get them out) put in one of my bank accounts that I don't use. I'll make her an authorized signer, but it will still be my account.

Of course this means I can monitor every dime she's spending.  :lildevil: