Minnesota updates garnishment laws protecting wages and government benefits

On March 20, 2025, the Minnesota State Legislature introduced Senate Bill 2847, aimed at reforming garnishment laws to better protect vulnerable residents from financial distress. The bill seeks to amend existing statutes regarding the exemption of certain funds from garnishment, a legal process where a creditor can claim a portion of a debtor's wages or bank account to satisfy a debt.

Key provisions of Senate Bill 2847 include raising the exemption limits for various categories of assets. For instance, the bill proposes that tools necessary for business or professional work can be exempted up to a total value of $13,500, while household tools and equipment, such as lawnmowers and snow removal gear, would have an exemption cap of $3,000. Additionally, health savings accounts and medical savings accounts would be protected up to $25,000.

The bill has sparked notable debates among lawmakers and stakeholders. Proponents argue that the current garnishment laws disproportionately affect low-income individuals and families, making it difficult for them to maintain financial stability. They assert that the proposed changes would provide essential protections for those who rely on these funds for basic living expenses. Conversely, some opponents express concerns that increasing exemption limits could hinder creditors' ability to recover debts, potentially leading to increased financial risks for lenders.

The implications of Senate Bill 2847 are significant, as it addresses the balance between protecting consumers and ensuring that creditors can collect debts. Experts suggest that if passed, the bill could alleviate some financial pressures on low-income households, potentially reducing reliance on government assistance programs. However, it may also lead to a reevaluation of lending practices in Minnesota.

As the legislative process continues, the bill will undergo further scrutiny and potential amendments before a final vote. Stakeholders from various sectors are closely monitoring its progress, as the outcomes could reshape the financial landscape for many Minnesotans.