1.1 	A bill for an act
1.2 	relating to creditors remedies; prohibiting
1.3 	prejudgment garnishment in certain circumstances;
1.4 	amending Minnesota Statutes 2004, sections 551.05,
1.5 	subdivisions 1a, 3, 4, by adding a subdivision;
1.6 	571.71; 571.72, subdivision 4; 571.79; 571.912;
1.7 	571.914, subdivisions 1, 2, 4; 571.93, subdivision 1;
1.8 	repealing Minnesota Statutes 2004, sections 551.05,
1.9 	subdivisions 5, 6; 571.914, subdivision 3.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 551.05,
1.12 	subdivision 1a, is amended to read:
1.13 		Subd. 1a.Exemption notice.  If the writ of execution is
1.14 	being used by the attorney to levy funds of a judgment debtor
1.15 	who is a natural person and if the funds to be levied are held
1.16 	on deposit at any financial institution, the attorney for the
1.17 	judgment creditor shall serve with the writ of execution two
1.18 	copies of an exemption notice.  The notice must be substantially
1.19 	in the form set forth below.  Failure of the attorney for the
1.20 	judgment creditor to send the exemption notice renders the
1.21 	execution levy void, and the financial institution shall take no
1.22 	action.  However, if this subdivision is being used to execute
1.23 	on funds that have previously been garnished in compliance with
1.24 	section 571.71, the attorney for judgment creditor is not
1.25 	required to serve an additional exemption notice.  In that
1.26 	event, the execution levy shall only be effective as to the
1.27 	funds that were subject to the prior garnishment.  Upon receipt
2.1 	of the writ of execution and exemption notices, the financial
2.2 	institution shall retain as much of the amount due under section
2.3 	550.04 as the financial institution has on deposit owing to the
2.4 	judgment debtor, but not more than 100 percent of the amount
2.5 	remaining due on the judgment, or $10,000, whichever is less.
2.6 	The notice informing a judgment debtor that an execution
2.7 	levy has been used to attach funds of the judgment debtor to
2.8 	satisfy a claim must be substantially in the following form:
2.9 	
2.10 	STATE OF MINNESOTA                             DISTRICT COURT
2.11 	County of ................         .........JUDICIAL DISTRICT
2.12 	................(Judgment Creditor)
2.13 	................(Judgment Debtor)
2.14 	TO:  Judgment Debtor                 EXEMPTION NOTICE
2.15 	An order for attachment, garnishment summons, or levy of
2.16 	execution (strike inapplicable language) has been served on
2.17 	............. (bank or other financial institution where you
2.18 	have an account).
2.19 	Your account balance is $........
2.20 	The amount being held is $........
2.21 	However, all or a portion of the funds in your account will
2.22 	normally be exempt from creditors' claims if they are in one of
2.23 	the following categories:
2.24 	(1) relief based on need.  This includes the Minnesota
2.25 	Family Investment Program (MFIP), Work First Program, Medical
2.26 	Assistance (MA), General Assistance (GA), General Assistance
2.27 	Medical Care (GAMC), Emergency General Assistance (EGA),
2.28 	Minnesota Supplemental Aid (MSA), MSA Emergency Assistance
2.29 	(MSA-EA), Supplemental Security Income (SSI), and Energy
2.30 	Assistance;
2.31 	(2) Social Security benefits (Old Age, Survivors, or
2.32 	Disability Insurance);
2.33 	(3) unemployment benefits, workers' compensation, or
2.34 	veterans' benefits;
2.35 	(4) an accident, disability, or retirement pension or
2.36 	annuity;
3.1 	(5) life insurance proceeds;
3.2 	(6) the earnings of your minor child and any child support
3.3 	paid to you; or
3.4 	(7) money from a claim for damage or destruction of exempt
3.5 	property (such as household goods, farm tools, business
3.6 	equipment, a mobile home, or a car).
3.7 	The following funds are also exempt:
3.8 	(8) all earnings of a person in category (1);
3.9 	(9) all earnings of a person who has received relief based
3.10 	on need, or who has been an inmate of a correctional
3.11 	institution, within the last six months;
3.12 	(10) 75 percent of every judgment debtor's after tax
3.13 	earnings; or
3.14 	(11) all of a judgment debtor's after tax earnings below 40
3.15 	times the federal minimum wage.
3.16 	TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:
3.17 	Categories (10) and (11):  20 days
3.18 	Categories (8) and (9):  60 days
3.19 	All others:  no time limit, as long as funds are traceable
3.20 	to the exempt source.  (In tracing funds, the first-in,
3.21 	first-out method is used.  This means money deposited first is
3.22 	spent first.)  The money being sought by the judgment creditor
3.23 	is being held in your account to give you a chance to claim an
3.24 	exemption.
3.25 	TO CLAIM AN EXEMPTION:
3.26 	Fill out, sign, and mail or deliver one copy of the
3.27 	attached exemption claim form to the institution which sent you
3.28 	this notice and mail or deliver one copy to the judgment
3.29 	creditor's attorney.  The address for the judgment creditor's
3.30 	attorney is set forth below.Both copies must be mailed or
3.31 	delivered on the same day.
3.32 	NOTE:  You may help resolve your claim faster if you send
3.33 	to the creditor's attorney written proof or documents that
3.34 	show why your money is exempt.  If you have questions
3.35 	regarding the documents to send as proof of an exemption,
3.36 	call the creditor's attorney.  If you do not send written
4.1 	proof and the creditor's attorney has questions about your
4.2 	exemption claim, the creditor's attorney may object to your
4.3 	claim which may result in a further delay in releasing your
4.4 	exempt funds.
4.5 	If they do not get the exemption claim back from you within
4.6 	14 days of the date they mailed or gave it to you, they will be
4.7 	free to turn the money over to the attorney for the judgment
4.8 	creditor.  If you are going to claim an exemption, do so as soon
4.9 	as possible, because your money may be held until it is decided.
4.10 	IF YOU CLAIM AN EXEMPTION:
4.11 	(1) nonexempt money can be turned over to the judgment
4.12 	creditor or sheriff;
4.13 	(2) the financial institution will keep holding the money
4.14 	claimed to be exempt; and
4.15 	(3) seven days after receiving your exemption claim, the
4.16 	financial institution will release the money to you unless
4.17 	before then it receives an objection to your exemption claim.
4.18 	IF THE JUDGMENT CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:
4.19 	The institution will hold the money until a court decides
4.20 	if your exemption claim is valid, BUT ONLY IF the institution
4.21 	gets a copy of your court motion papers asserting the exemption
4.22 	WITHIN TEN DAYS after the objection is personally served on you,
4.23 	or within 13 days from the date the objection is mailed to you.
4.24 	You may wish to consult an attorney at once if the judgment
4.25 	creditor objects to your exemption claim.
4.26 	MOTION TO DETERMINE EXEMPTION:
4.27 	At any time after your funds have been held, you may ask
4.28 	for a court decision on the validity of your exemption claim by
4.29 	filing a request for hearing which may be obtained at the office
4.30 	of the court administrator of the above court.
4.31 	PENALTIES:
4.32 	If you claim an exemption in bad faith, or if the judgment
4.33 	creditor wrongly objects to an exemption in bad faith, the court
4.34 	may order the person who acted in bad faith to pay costs, actual
4.35 	damages, attorney fees, and an additional amount of up to $100.
4.36 	.............................
5.1 	                               .............................
5.2 	                               .............................
5.3 	                               .............................
5.4 	                               Name and address of (Attorney
5.5 	                               for) Judgment Creditor
5.6 	EXEMPTION:
5.7 	(a) Amount of exemption claim.
5.8 	/ / I claim ALL the funds being held are exempt.
5.9 	/ / I claim SOME of the funds being held are exempt.
5.10 	The exempt amount is $............
5.11 	(b) Basis for exemption.
5.12 	Of the 11 categories listed above, I am in category number
5.13 	............  (If more than one category applies, you may fill
5.14 	in as many as apply.)  The source of the exempt funds is the
5.15 	following:
5.16 	.............................................................
5.17 	.............................................................
5.18 	.............................................................
5.19 	(If the source is a type of relief based on need, list the
5.20 	case number and county:
5.21 	case number:  ...............;
5.22 	county:  ....................)
5.23 	I hereby authorize any agency that has distributed relief
5.24 	to me or any correctional institution in which I was an inmate
5.25 	to disclose to the above named judgment creditor's attorney only
5.26 	whether or not I am or have been a recipient of relief based on
5.27 	need or an inmate of a correctional institute within the last
5.28 	six months.
5.29 	I have mailed or delivered a copy of the exemption notice
5.30 	to the judgment creditor's attorney at the address indicated
5.31 	above.
5.32 	.............................
5.33 	                             DEBTOR
5.34 	DATED:  .............        .............................
5.35 	                             .............................
5.36 	                             .............................
6.1 	                             DEBTOR ADDRESS
6.2 	                             .............................
6.3 	                             DEBTOR TELEPHONE NUMBER

6.4 	Sec. 2. Minnesota Statutes 2004, section 551.05,
6.5 	subdivision 3, is amended to read:
6.6 		Subd. 3.Objection to exemption claim. Objection shall
6.7 	be interposed by mailing or delivering one copy of the written
6.8 	objection to the financial institution and one copy of the
6.9 	written objection to the judgment debtor along with a copy of
6.10 	the judgment debtor's claimed exemption form.  Both copies of an
6.11 	objection to an exemption claim shall be mailed or delivered on
6.12 	the same date.  The financial institution may rely on the date
6.13 	of mailing or delivery of a notice to it in computing any time
6.14 	periods in this section.  The written objection must be
6.15 	substantially in the form specified in subdivision 5.If a
6.16 	judgment creditor objects to a judgment debtor's exemption
6.17 	claim, the judgment creditor shall obtain from the court
6.18 	administrator or a designated motion calendar deputy a date and
6.19 	time for an evidentiary hearing on its objection.  The judgment
6.20 	creditor shall serve on the judgment debtor and financial
6.21 	institution, personally or by first class mail, a notice of
6.22 	hearing on creditor's objection to debtor's exemption claim in
6.23 	the form specified in subdivision 3a, on the same day that it
6.24 	obtains the hearing date.  The hearing date obtained by the
6.25 	judgment creditor must be no earlier than five business days and
6.26 	no later than ten business days from the date the judgment
6.27 	creditor requests and obtains the hearing date.  An order
6.28 	stating whether the judgment debtor's funds are exempt must be
6.29 	issued by the court within three days of the date of the hearing.

6.30 	Sec. 3. Minnesota Statutes 2004, section 551.05, is
6.31 	amended by adding a subdivision to read:
6.32 		Subd. 3a.Notice of hearing on judgment creditor's
6.33 	objection to judgment debtor's exemption claim. The judgment
6.34 	creditor's notice of hearing on its objection to the judgment
6.35 	debtor's exemption claim must be in substantially the following
6.36 	form:
7.1 	STATE OF MINNESOTA DISTRICT COURT
7.2 	County of .........................JUDICIAL DISTRICT
7.3 	.................(Judgment Creditor) NOTICE OF
7.4 	.................(Judgment Debtor) HEARING ON
7.5 	.................(Garnishee) (Third Party) JUDGMENT CREDITOR'S
7.6 	                                                  OBJECTION TO
7.7 	                                             JUDGMENT DEBTOR'S
7.8 	                                               EXEMPTION CLAIM 
7.9 	The judgment creditor objects to your claim for exemption
7.10 	from garnishment, levy of execution, order for attachment
7.11 	(strike inapplicable language) for the following reason(s):
7.12 	.................................
7.13 	.................................
7.14 	.................................
7.15 	A hearing will be held in this case on (Date) at (Time) at
7.16 	(Place) to resolve whether your funds at (Financial Institution)
7.17 	are exempt.  You have claimed that such funds are exempt because
7.18 	.................................................................
7.19 	.................................................................
7.20 	.................................................................
7.21 	..............................................................
7.22 	At the hearing, you will have to prove that your funds are
7.23 	exempt.  If you do not attend the hearing, the judge may order
7.24 	that your funds be released to the judgment creditor.  The judge
7.25 	will issue an order within three days of the hearing regarding
7.26 	whether your funds are exempt.
7.27 	Because the judgment creditor objected to your exemption
7.28 	claim, your financial institution will retain the funds you
7.29 	claim to be exempt until it receives:  (1) a written release
7.30 	from either the judgment creditor or you; or (2) an order from
7.31 	the court regarding whether your funds are exempt.
7.32 	Dated:  .......
7.33 	........................................
7.34 	                  Judgment Creditor or Creditor's Attorney
7.35 	                  ........................................
7.36 	                  .................................Address 
8.1 	(Note to both parties:  Bring with you to the hearing all
8.2 	documents and materials relevant to the exemption claim and
8.3 	objection.  Failure to do so could delay the court's decision.) 

8.4 	Sec. 4. Minnesota Statutes 2004, section 551.05,
8.5 	subdivision 4, is amended to read:
8.6 		Subd. 4.Duties of financial institution if objection is
8.7 	made to exemption claim.  Upon receipt of a written objection
8.8 	from the judgment creditor within the specified seven-day
8.9 	period, the financial institution shall retain the funds claimed
8.10 	to be exempt. Unless the financial institution receives a
8.11 	request for hearing and notice of hearing from the judgment
8.12 	debtor asserting exemption rights within ten days after receipt
8.13 	of a written objection to the exemption,The funds remain
8.14 	subject to the execution levy as if no claim of exemption had
8.15 	been made and shall be remitted to the judgment creditor's
8.16 	attorney within seven days.  If a request for hearing and notice
8.17 	of hearing to determine the validity of a claim of exemption is
8.18 	received by the financial institution within the period
8.19 	provided, it shall retain the funds claimed to be exempt until
8.20 	otherwise ordered by the court. The financial institution shall
8.21 	retain the funds claimed to be exempt until it receives:  (1) a
8.22 	written release from either the judgment creditor or judgment
8.23 	debtor; or (2) an order stating whether the funds are exempt.

8.24 	Sec. 5. Minnesota Statutes 2004, section 571.71, is
8.25 	amended to read:
8.26 	571.71 GARNISHMENT; WHEN AUTHORIZED.
8.27 	As an ancillary proceeding to a civil action for the
8.28 	recovery of money, a creditor may issue a garnishment summons as
8.29 	provided in this chapter against any third party in the
8.30 	following instances:
8.31 	(1) at the time the civil action is commenced or at any
8.32 	time after the commencement of the civil action, but before the
8.33 	entry of a judgment, if the court orders the issuance of the
8.34 	garnishment summons pursuant to section 571.93; or 
8.35 	(2) at any time 40 days or more after service of the
8.36 	summons and complaint upon the debtor in the civil action when a
9.1 	judgment by default could have, but has not, been entered
9.2 	pursuant to Rule 55.01(a) of the Minnesota Rules of Civil
9.3 	Procedure for the District Courts.  No filing of a pleading or
9.4 	other documents by the creditor is required to issue a
9.5 	garnishment summons under this clause; however, the creditor
9.6 	must comply with the service requirement of section 571.72,
9.7 	subdivision 4; or 
9.8 	(3) at any time after entry of a money judgment in the
9.9 	civil action.

9.10 	Sec. 6. Minnesota Statutes 2004, section 571.72,
9.11 	subdivision 4, is amended to read:
9.12 		Subd. 4.Service of garnishment summons on debtor.  A
9.13 	copy of the garnishment summons and copies of all other papers
9.14 	served on the garnishee must be served by mail at the last known
9.15 	mailing address of the debtor not later than five days after the
9.16 	service is made upon the garnishee. The first time a
9.17 	garnishment summons is served on the debtor pursuant to section
9.18 	571.71, clause (2), the creditor shall also serve a copy of the
9.19 	affidavit of service of the original summons and complaint.
9.20 	Service of the garnishment documents on the debtor is effective
9.21 	upon mailing.

9.22 	Sec. 7. Minnesota Statutes 2004, section 571.79, is
9.23 	amended to read:
9.24 	571.79 DISCHARGE OF A GARNISHEE.
9.25 	Except as provided in paragraph (h) (g), the garnishee,
9.26 	after disclosure, shall be discharged of any further retention
9.27 	obligation to the creditor with respect to a specific
9.28 	garnishment summons when one of the following conditions are met:
9.29 	(a) The garnishee discloses that the garnishee is not
9.30 	indebted to the debtor or does not possess any money or other
9.31 	property belonging to the debtor that is attachable as defined
9.32 	in section 571.73, subdivision 3.  The disclosure is conclusive
9.33 	against the creditor and discharges the garnishee from any
9.34 	further obligation to the creditor other than to retain all
9.35 	nonexempt disposable earnings, indebtedness, money, and property
9.36 	of the debtor which was disclosed.
10.1 	(b) The garnishee discloses that the garnishee is indebted
10.2 	to the debtor as indicated on the garnishment disclosure form.
10.3 	The disclosure is conclusive against the creditor and discharges
10.4 	the garnishee from any further obligation to the creditor other
10.5 	than to retain all nonexempt disposable earnings, indebtedness,
10.6 	money, and property of the debtor that was disclosed.
10.7 	(c) If the garnishee was served with a garnishment summons
10.8 	before entry of judgment against the debtor by the creditor in
10.9 	the civil action and the garnishee has retained any disposable
10.10 	earnings, indebtedness, money, or property of the debtor, 270
10.11 	days after the garnishment summons is served the garnishee is
10.12 	discharged and the garnishee shall return any disposable
10.13 	earnings, indebtedness, money, and property to the debtor.
10.14 	(d) (c) If the garnishee was served with a garnishment
10.15 	summons after entry of judgment against the debtor by the
10.16 	creditor in the civil action and the garnishee has retained any
10.17 	disposable earnings, indebtedness, money, or property of the
10.18 	debtor, 180 days after the garnishment summons is served the
10.19 	garnishee is discharged and the garnishee shall return any
10.20 	disposable earnings, other indebtedness, money, and property to
10.21 	the debtor.
10.22 	(e) (d) If the garnished indebtedness, money, or other
10.23 	property is destroyed without any negligence of the garnishee,
10.24 	the garnishee is discharged of any liability to the creditor for
10.25 	nondelivery of the garnished indebtedness, money, and other
10.26 	property.
10.27 	(f) (e) The court may, upon motion of an interested person,
10.28 	discharge the garnishee as to any disposable earnings, other
10.29 	indebtedness, money, and property in excess of the amount that
10.30 	may be required to satisfy the creditor's claim.
10.31 	(g) (f) The discharge of the garnishee pursuant to
10.32 	paragraph (a), (b), (c),or (d) (c) is not determinative of the
10.33 	rights of the creditor, debtor, or garnishee with respect to any
10.34 	other garnishment summons, even another garnishment summons
10.35 	involving the same parties, unless and to the extent adjudicated
10.36 	pursuant to the procedures described in paragraph (h) (g).
11.1 	(h) (g) The garnishee is not discharged if within 20 days
11.2 	of the service of the garnishee's disclosure or the return to
11.3 	the debtor of any disposable earnings, indebtedness money, or
11.4 	other property of the debtor, whichever is later, an interested
11.5 	person (1) serves a motion scheduled to be heard within 30 days
11.6 	of the service of the motion relating to the garnishment, or (2)
11.7 	serves a motion scheduled to be heard within 30 days of the
11.8 	service of the motion for leave to file a supplemental complaint
11.9 	against the garnishee, as provided under section 571.75,
11.10 	subdivision 4, and the court upon proper showing vacates the
11.11 	discharge of the garnishee.

11.12 	Sec. 8. Minnesota Statutes 2004, section 571.912, is
11.13 	amended to read:
11.14 	571.912 FORM OF EXEMPTION NOTICE.
11.15 	The notice informing a debtor that an order for attachment,
11.16 	garnishment summons, or levy by execution has been used to
11.17 	attach funds of the debtor to satisfy a claim must be
11.18 	substantially in the following form:
11.19 	STATE OF MINNESOTA                            DISTRICT COURT
11.20 	COUNTY OF ................         ........JUDICIAL DISTRICT
11.21 	........................(Creditor)
11.22 	........................(Debtor)
11.23 	TO:  Debtor                                EXEMPTION NOTICE
11.24 	An order for attachment, garnishment summons, or levy of
11.25 	execution (strike inapplicable language) has been served on
11.26 	............ (bank or other financial institution)
11.27 	............... where you have an account.
11.28 	Your account balance is $.............
11.29 	The amount being held is $............
11.30 	However, all or a portion of the funds in your account will
11.31 	normally be exempt from creditors' claims if they are in one of
11.32 	the following categories:
11.33 	(1) relief based on need.  This includes the Minnesota
11.34 	Family Investment Program (MFIP), Emergency Assistance (EA),
11.35 	Work First Program, Medical Assistance (MA), General Assistance
11.36 	(GA), General Assistance Medical Care (GAMC), Emergency General
12.1 	Assistance (EGA), Minnesota Supplemental Aid (MSA), MSA
12.2 	Emergency Assistance (MSA-EA), Supplemental Security Income
12.3 	(SSI), and Energy Assistance;
12.4 	(2) Social Security benefits (Old Age, Survivors, or
12.5 	Disability Insurance);
12.6 	(3) unemployment benefits, workers' compensation, or
12.7 	veterans' benefits;
12.8 	(4) an accident, disability, or retirement pension or
12.9 	annuity;
12.10 	(5) life insurance proceeds;
12.11 	(6) the earnings of your minor child and any child support
12.12 	paid to you; or
12.13 	(7) money from a claim for damage or destruction of exempt
12.14 	property (such as household goods, farm tools, business
12.15 	equipment, a mobile home, or a car).
12.16 	The following funds are also exempt:
12.17 	(8) all earnings of a person in category (1);
12.18 	(9) all earnings of a person who has received relief based
12.19 	on need, or who has been an inmate of a correctional
12.20 	institution, within the last six months;
12.21 	(10) 75 percent of every debtor's after tax earnings; and
12.22 	(11) all of a debtor's after tax earnings below 40 times
12.23 	the federal minimum wage.
12.24 	TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:
12.25 	Categories (10) and (11):  20 days
12.26 	Categories (8) and (9):  60 days
12.27 	All others:  no time limit, as long as funds are traceable
12.28 	to the exempt source.  (In tracing funds, the first-in,
12.29 	first-out method is used.  This means money deposited first is
12.30 	spent first.)  The money being sought by the creditor is being
12.31 	held in your account to give you a chance to claim an exemption.
12.32 	TO CLAIM AN EXEMPTION:
12.33 	Fill out, sign, and mail or deliver one copy of the
12.34 	attached exemption claim form to the institution which sent you
12.35 	this notice and mail or deliver one copy to the creditor's
12.36 	attorney.  In the event that there is no attorney for the
13.1 	creditor, then such notice shall be sent directly to the
13.2 	creditor.  The address for the creditor's attorney or the
13.3 	creditor is set forth below.Both copies must be mailed or
13.4 	delivered on the same day.
13.5 	NOTE:  You may help resolve your claim faster if you send
13.6 	to the creditor's attorney written proof or documents that
13.7 	show why your money is exempt.  If you have questions
13.8 	regarding the documents to send as proof of an exemption,
13.9 	call the creditor's attorney.  If you do not send written
13.10 	proof and the creditor's attorney has questions about your
13.11 	exemption claim, the creditor's attorney may object to your
13.12 	claim which may result in a further delay in releasing your
13.13 	exempt funds.
13.14 	If they do not get the exemption claim back from you within
13.15 	14 days of the date they mailed or gave it to you, they will be
13.16 	free to turn the money over to the sheriff or the creditor.  If
13.17 	you are going to claim an exemption, do so as soon as possible,
13.18 	because your money may be held until it is decided.
13.19 	IF YOU CLAIM AN EXEMPTION:
13.20 	(1) nonexempt money can be turned over to the creditor or
13.21 	sheriff;
13.22 	(2) the financial institution will keep holding the money
13.23 	claimed to be exempt; and
13.24 	(3) seven days after receiving your exemption claim, the
13.25 	financial institution will release the money to you unless
13.26 	before then it receives an objection to your exemption claim.
13.27 	IF THE CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:
13.28 	The institution will hold the money until a court decides
13.29 	if your exemption claim is valid, BUT ONLY IF the institution
13.30 	gets a copy of your court motion papers asserting the exemption
13.31 	WITHIN TEN DAYS after the objection is personally served on you,
13.32 	or within 13 days from the date the objection is mailed to you.
13.33 	You may wish to consult an attorney at once if the creditor
13.34 	objects to your exemption claim.
13.35 	MOTION TO DETERMINE EXEMPTION:
13.36 	At any time after your funds have been held, you may ask
14.1 	for a court decision on the validity of your exemption claim by
14.2 	filing a request for hearing which may be obtained at the office
14.3 	of the court administrator of the above court.
14.4 	PENALTIES:
14.5 	If you claim an exemption in bad faith, or if the creditor
14.6 	wrongly objects to an exemption in bad faith, the court may
14.7 	order the person who acted in bad faith to pay costs, actual
14.8 	damages, attorney fees, and an additional amount of up to $100.
14.9 	.............................
14.10 	                              .............................
14.11 	                              .............................
14.12 	                              .............................
14.13 	                              Name and address of (Attorney
14.14 	                              for) Judgment Creditor
14.15 	EXEMPTION:
14.16 	(If you claim an exemption complete the following):
14.17 	(a) Amount of exemption claim.
14.18 	/ / I claim ALL the funds being held are exempt.
14.19 	/ / I claim SOME of the funds being held are exempt.
14.20 	The exempt amount is $............
14.21 	(b) Basis for exemption.
14.22 	Of the eleven categories listed above, I am in category
14.23 	number ............  (If more than one category applies, you may
14.24 	fill in as many as apply.)  The source of the exempt funds is
14.25 	the following:
14.26 	.............................................................
14.27 	.............................................................
14.28 	.............................................................
14.29 	(If the source is a type of relief based on need, list the
14.30 	case number and county:
14.31 	case number:  ...............;
14.32 	county:  ....................)
14.33 	I hereby authorize any agency that has distributed relief
14.34 	to me or any correctional institution in which I was an inmate
14.35 	to disclose to the above named creditor or its attorney only
14.36 	whether or not I am or have been a recipient of relief based on
15.1 	need or an inmate of a correctional institute within the last
15.2 	six months.
15.3 	I have mailed or delivered a copy of the exemption notice
15.4 	to the creditor's attorney at the address indicated above.
15.5 	DATED:  .............        .............................
15.6 	                             DEBTOR
15.7 	                             .............................
15.8 	                             DEBTOR ADDRESS
15.9 	                             .............................
15.10 	                             DEBTOR TELEPHONE NUMBER

15.11 	Sec. 9. Minnesota Statutes 2004, section 571.914,
15.12 	subdivision 1, is amended to read:
15.13 		Subdivision 1.Objections. An objection shall be
15.14 	interposed by mailing or delivering one copy of the written
15.15 	objection to the financial institution and one copy of the
15.16 	written objection to the debtor.  A Request for Hearing and
15.17 	Notice of Hearing form must accompany each copy of the written
15.18 	objection.
15.19 	Both copies of an objection to an exemption claim must be
15.20 	mailed or delivered on the same date.  The financial institution
15.21 	may rely on the date of mailing or delivery of a notice to it in
15.22 	computing any time periods in this section.
15.23 	The written objection, and Request for Hearing and Notice
15.24 	of Hearing, must be substantially in the forms set out in
15.25 	subdivisions 2 and 3.
15.26 	The court shall provide clerical assistance to help with
15.27 	the writing and filing of a Request for Hearing by any person
15.28 	not represented by counsel.  The court administrator may charge
15.29 	a fee of $1 for the filing of a Request for Hearing.  Upon the
15.30 	filing of a Request for Hearing, the court administrator shall
15.31 	schedule the matter for hearing no later than five business days
15.32 	from the date of filing.  The court administrator shall
15.33 	immediately send a completed copy of the request, including the
15.34 	hearing date, time, and place to the adverse party and to the
15.35 	financial institution by first class mail.
15.36 	An order stating whether the debtor's funds are exempt
16.1 	shall be issued by the court within three days of the date of
16.2 	the hearing.
16.3 	If a creditor objects to a debtor's exemption claim, the
16.4 	creditor shall obtain from the court administrator or a
16.5 	designated motion calendar deputy a date and time for an
16.6 	evidentiary hearing on its objection.  The creditor shall serve
16.7 	on the debtor and garnishee, personally or by first class mail,
16.8 	a notice of hearing on creditor's objection to debtor's
16.9 	exemption claim in the form specified in subdivision 2, on the
16.10 	same day that it obtains the hearing date.  The hearing date
16.11 	obtained by the creditor must be no earlier than five business
16.12 	days and no later than ten business days from the date the
16.13 	creditor requests and obtains the hearing date.  An order
16.14 	stating whether the debtor's funds are exempt must be issued by
16.15 	the court within three days of the date of the hearing.

16.16 	Sec. 10. Minnesota Statutes 2004, section 571.914,
16.17 	subdivision 2, is amended to read:
16.18 		Subd. 2.Notice of hearing on creditor's objection to
16.19 	debtor's exemption claim. (a) The written objection to the
16.20 	debtor must be in substantially the following form:
16.21 	STATE OF MINNESOTA                             DISTRICT COURT
16.22 	COUNTY OF ....................    ..........JUDICIAL DISTRICT
16.23 	....................(Creditor)
16.24 	....................(Debtor)             CREDITOR'S OBJECTION
16.25 	....................(Garnishee)            TO EXEMPTION CLAIM 
16.26 	The creditor objects to your claim for exemption from
16.27 	garnishment, levy of execution, order for attachment (strike
16.28 	inapplicable language) for the following reason(s):
16.29 	.................................................................
16.30 	.................................................................
16.31 	.................................................................
16.32 	Because of this objection, your financial institution will
16.33 	retain the funds you claimed to be exempt for an additional ten
16.34 	days.  If you wish to request a hearing on your exemption claim,
16.35 	you need to do so within ten days from the date the objection
16.36 	was personally served on you, or within 13 days of the date the
17.1 	objection was mailed to you.  You may request a hearing by
17.2 	completing the attached form and filing it with the court
17.3 	administrator.
17.4 	1.  The court shall provide clerical assistance to help
17.5 	with the writing and filing of a Request for Hearing by any
17.6 	person not represented by counsel.  The court administrator may
17.7 	charge a fee of $1 for the filing of a Request for Hearing.
17.8 	2.  Upon the filing of a Request for Hearing, the clerk
17.9 	shall schedule the matter for a hearing no later than five
17.10 	business days from the date of filing.  The court administrator
17.11 	shall forthwith send a completed copy of the request, including
17.12 	the hearing date, time, and place to the adverse party and to
17.13 	the financial institution by first class mail.
17.14 	3.  If it is possible that the financial institution might
17.15 	not receive the request mailed from the court administrator
17.16 	within ten days, then you may want to personally deliver a copy
17.17 	of the request to the financial institution after you have filed
17.18 	your request with the court.
17.19 	4.  An order stating whether your funds are exempt shall be
17.20 	issued by the court within three days of the date of the hearing.
17.21 	If you do not file a Request for Hearing within ten days of
17.22 	the date the objection was personally served on you, or within
17.23 	13 days from the date the objection was mailed to you, your
17.24 	financial institution may turn your funds over to your creditor.
17.25 	If you file a Request for Hearing and your financial
17.26 	institution receives it within ten days of the date it received
17.27 	this objection, your financial institution will retain your
17.28 	funds claimed to be exempt until otherwise ordered by the court,
17.29 	or until the garnishment lapses pursuant to Minnesota Statutes,
17.30 	section 571.79.
17.31 	..................................
17.32 	                          (CREDITOR OR CREDITOR'S ATTORNEY.) 
17.33 	The creditor's notice of hearing on its objection to the
17.34 	debtor's exemption claim must be in substantially the following
17.35 	form:
17.36 	STATE OF MINNESOTA DISTRICT COURT
18.1 	COUNTY OF ..............................JUDICIAL DISTRICT
18.2 	....................(Creditor) NOTICE OF HEARING ON
18.3 	....................(Debtor) CREDITOR'S OBJECTION
18.4 	....................(Garnishee)(Third Party) TO DEBTOR'S
18.5 	                                              EXEMPTION CLAIM 
18.6 	The creditor objects to your claim for exemption from
18.7 	garnishment, levy of execution, order for attachment (strike
18.8 	inapplicable language) for the following reason(s):
18.9 	.................................................................
18.10 	.................................................................
18.11 	.................................................................
18.12 	A hearing will be held in this case on (Date) at (Time) at
18.13 	(Place) to resolve whether your funds at (Financial Institution)
18.14 	are exempt.  You have claimed that such funds are exempt
18.15 	because..........................................................
18.16 	.................................................................
18.17 	.................................................................
18.18 	At the hearing, you will have to prove that your funds are
18.19 	exempt.  If you do not attend the hearing, the judge may order
18.20 	that your funds be released to the judgment creditor.  The judge
18.21 	will issue an order within three days of the hearing regarding
18.22 	whether your funds are exempt.
18.23 	Because the creditor objected to your exemption claim, your
18.24 	financial institution will retain the funds you claim to be
18.25 	exempt until it receives:  (1) a written release from either the
18.26 	creditor or you; or (2) an order from the court regarding
18.27 	whether your funds are exempt.
18.28 	Dated:................
18.29 	........................................
18.30 	                  Judgment Creditor or Creditor's Attorney
18.31 	                  ........................................
18.32 	                  .................................Address 
18.33 	(Note to both parties:  Bring with you to the hearing all
18.34 	documents and materials relevant to the exemption claim and
18.35 	objection.  Failure to do so could delay the court's decision.) 

18.36 	Sec. 11. Minnesota Statutes 2004, section 571.914,
19.1 	subdivision 4, is amended to read:
19.2 		Subd. 4.Duties of financial institution if objection is
19.3 	made to exemption claim.  Upon receipt of a written objection
19.4 	from the creditor within the specified seven-day period, the
19.5 	financial institution shall retain the funds claimed to be
19.6 	exempt. Unless the financial institution receives a request for
19.7 	hearing from the debtor asserting exemption rights within ten
19.8 	days after receipt of the written objection to the exemption,
19.9 	The funds remain subject to the garnishment summons as if no
19.10 	claim of exemption had been made. If a notice of motion and
19.11 	motion to determine the validity of a claim of exemption is
19.12 	received by the financial institution within the period
19.13 	provided, the financial institution shall retain the funds
19.14 	claimed to be exempt until otherwise ordered by the court, or
19.15 	until the garnishment lapses pursuant to section 571.79.The
19.16 	financial institution shall retain the funds claimed to be
19.17 	exempt until it receives:  (1) a written release from either the
19.18 	creditor or debtor; or (2) an order stating whether the funds
19.19 	are exempt.

19.20 	Sec. 12. Minnesota Statutes 2004, section 571.93,
19.21 	subdivision 1, is amended to read:
19.22 		Subdivision 1.Grounds.  The court may order the issuance
19.23 	of a garnishment summons before judgment or default in the civil
19.24 	action, if a summons and complaint, or copies of these
19.25 	documents, are filed with the appropriate court, and if, upon
19.26 	application to the court, it appears that any of the following
19.27 	grounds exist:
19.28 	(1) the debtor has assigned, secreted, or disposed of, or
19.29 	is about to assign, secrete, or dispose of, any of the debtor's
19.30 	nonexempt property, with intent to delay or defraud any of
19.31 	debtor's creditors;
19.32 	(2) the debtor has removed, or is about to remove, any of
19.33 	the debtor's nonexempt property from this state, with intent to
19.34 	delay or defraud any of debtor's creditors;
19.35 	(3) the debtor has converted or is about to convert any of
19.36 	the debtor's nonexempt property into money or credits, for the
20.1 	purpose of placing the property beyond the reach of any of
20.2 	debtor's creditors;
20.3 	(4) the debtor has committed an intentional fraud giving
20.4 	rise to the claim upon which the civil action is brought;
20.5 	(5) the debtor has committed any act or omission, for which
20.6 	the debtor has been convicted of a felony, giving rise to the
20.7 	claim upon which the civil action is brought; or
20.8 	(6) the purpose of the garnishment is to establish quasi in
20.9 	rem jurisdiction and
20.10 	(i) debtor is a resident individual having left the state
20.11 	with intent to defraud creditors, or to avoid service; or
20.12 	(ii) a judgment had previously been obtained in another
20.13 	state consistent with due process; or
20.14 	(iii) the claim in the civil action is directly related to
20.15 	and arises from the property sought to be attached; or
20.16 	(iv) no forum is available to obtain a personal judgment
20.17 	against the debtor in the United States or elsewhere; or
20.18 	(7) the creditor has been unable to serve upon the debtor
20.19 	the summons and complaint in the civil action because the debtor
20.20 	has been inaccessible due to residence and employment in a
20.21 	building where access is restricted.

20.22 	Sec. 13. REPEALER.
 20.23 	Minnesota Statutes 2004, sections 551.05, subdivisions 5
20.24 	and 6, and 571.914, subdivision 3, are repealed.