A Letter from the President

Minnesota Legislative Update

No doubt that if you are a Minnesota resident you've recently heard of our Attorney General Mike Hatch's investigation into how the medical industry provides charity care in Minnesota. Along with that investigation collection practices of these medical facilities and of their collection agencies has come under scrutiny as well. In fact, there are bills being offered in our state legislature right now (S.F.1010 and H.F. 1088) that would change Minnesota garnishment law and how creditors can recover money owed them (medical or otherwise).

These bills would essentially add $480.00 of additional court costs and fees to the debtor and require that a judgment be in place before wages can be garnished. So, on top of adding more financial burden to the debtor, there would be a judgment that would remain on the debtors credit report for ten years, potentially damaging their ability to seek new credit. We do not see how this provides protection for the consumer. In addition it will greatly slow the pace at which your collection agency can recover your charge-offs.

The real issue is the fact that even though consumers can presently claim an exemption from garnishment in some cases (if they are on social security or have received some form of public assistance) they often ignore letters from collectors and attorneys that would inform them of this right. We think there is a better way to encourage these folks to seek exemption from garnishment than to re-write the law in a manner that would cost every debtor more money and potentially damage their credit.

If you agree, please contact your Minnesota representatives and urge them to not support S.F. 1010 and H.F. 1088. The real win-win is to employ a mechanism that will better inform consumers of their garnishment exemption rights.

Mark Neeb