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HF3188 (Legislative Session 94 (2025-2026))

Garnishment and bankruptcy exemptions modified.

Related bill: SF1606

AI Generated Summary

Purpose of the Bill

This bill aims to amend existing laws in Minnesota related to commerce, specifically focusing on garnishment and bankruptcy. The primary objective is to provide a new exemption related to funds in a debtor's depository account.

Main Provisions

  • Exemption for Depository Accounts: The bill adds a provision that exempts up to $1,000 in a debtor's depository accounts from garnishment. This applies regardless of the source of the funds within these accounts.
  • Financial Institution Requirements: When a financial institution receives a garnishment summons, they are required to ensure that at least $1,000, or the total amount in the account if less than $1,000, remains available in the debtor's accounts.
  • Combination of Exemptions: Debtors cannot claim this new exemption in addition to a similar existing exemption (provided under subdivision 28). This ensures that the new provision does not unduly compound exemption claims.
  • Limitations on Exemption: The exemption does not interfere with any contractual set-offs or security interests that a financial institution might assert under specific conditions outlined in other subdivisions (13 and 14).

Significant Changes to Existing Law

  • New Subdivision Addition: The bill introduces a new subdivision to Section 550.37, which outlines specific conditions under which funds in a depository account are protected from garnishment.
  • Clarification of Financial Institution's Role: There is a clear delineation of responsibilities for financial institutions in preserving certain amounts in a debtor's bank accounts during garnishment proceedings.

Relevant Terms

  • Garnishment
  • Bankruptcy
  • Exemption
  • Debtor
  • Depository Account
  • Financial Institution
  • Setoff
  • Security Interest

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 20, 2025HouseFloorActionIntroduction and first reading, referred toCommerce Finance and Policy
April 20, 2025HouseFloorActionIntroduction and first reading, referred toCommerce Finance and Policy
April 23, 2025HouseFloorActionAuthor added
April 23, 2025HouseFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill involves amending the exemption measures concerning garnishment procedures under section 571.73, subdivision 4.",
      "modified": []
    },
    "citation": "571.73",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Modifications to financial procedural requirements regarding exemption claims in section 571.78.",
      "modified": []
    },
    "citation": "571.78",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Related changes pertain to garnishment regulations and exemptions outlined in section 571.91.",
      "modified": []
    },
    "citation": "571.91",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Updates regarding garnishment process definitions included in section 571.911.",
      "modified": []
    },
    "citation": "571.911",
    "subdivision": ""
  }
]

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