Shady practices in the garnishment business

I met with a potential client today and learned about a new-to-me shady debt collection practice. The law firm in question served a complaint on the debtor, who failed to answer because she did not realize that she (effectively) had no rights unless she showed up in court to assert them. She also didn’t talk to a lawyer at the outset like she should have.

So the debt collector got a default judgment and started with garnishment. But because the funds in the debtor’s account were child support payments, and therefore exempt, she filled out the exemption form and sent it back. Seeing the writing on the wall, the debt collector objected to the garnishment, assuming (probably correctly) that the debtor would not bring the necessary motion in district court. Minnesota law favors creditors and debt collectors so much that all a debt collector needs to do is object. The debtor must then file a motion in district court to grant the exemption, placing the burden on the debtor, not on the debt collector.

The debt collector in this case would surely argue that it was only asserting its right to be sure the claimed exemption was legitimate. And that is certainly the reason the law gives the debt collector a right to object to exemption claims. However, by placing the burden on the debtor to bring a motion to determine the exemption, while all the debt collector has to do is object, and get paid, the law basically rubber stamps debt collectors’ objections to exemption claims.

Instead, the burden should be on the debt collector, given the realities of debt collection. But debtors obviously don’t have the lobby that the debt collectors do, so the law favors the debt collectors.