Eviction and Wage Garnishment suspensions are currently set to end on September 11, 2020. Foreclosures are a little different, as this article explains, because the Minnesota governor didn’t block foreclosure for the Coronavirus pandemic, he only blocked eviction. The whole point of foreclosure, however, is to give the mortgage lender the right to evict the borrower from the house, and mortgage lenders are still prevented from evicting.
WAGE GARNISHMENT AND EVICTION
In Executive Order 20-50, Governor Tim Walz prohibited wage garnishment and eviction against Minnesotans because of the Coronavirus. This has been a huge relief to People who are out of work and seeing drops in income. Income from working and a place to live are some of peoples’ most fundamental needs, and this executive order protected both of them.
Normally, wage garnishment in Minnesota let’s a creditor with a judgment take 25% of the net of a worker’s paycheck, once the worker is getting at least $290/week. Many people live paycheck to paycheck and cannot get by when their paychecks are 25% smaller, so this is catastrophic for them. Without 25% of their pay, people often cannot buy groceries or afford their rent or house payment.
This moratorium only applies to debts or judgments from consumer debts. That means that a business loan can still garnish, and so can taxes and child support.
Eviction, is normally how a landlord forces a tenant to leave a rented house or apartment if the tenant has stopped paying or is making problems for other tenants. It is pretty fast, usually taking 2-4 weeks from when the landlord first asks the Minnesota Housing Court to evict the tenant. There is a different housing court for each county in Minnesota.
The executive order forbids only residential evictions. This means that if a business has stopped paying its rent, then the commercial landlord can still evict the business. For example, if a restaurant closed for social distancing, it can still be evicted for failure to pay its rent.
The MN Governor’s Executive Order 20-79 does not prohibit foreclosure. It says that financial institutions are “requested to implement an immediate moratorium on all pending and future foreclosures.” This does not prohibit foreclosure, it just means that the governor would prefer if they didn’t do it. From my desk, writing on August 31, 2020, lenders are still foreclosing. People call my office daily with foreclosure questions even though the mortgage companies have been requested not to foreclose.
There is a federal law preventing foreclosure for FHA loans during Covid-19, but many loans are not FHA loans. How can I tell if my loan is an FHA loan? If you pay Private Mortgage Insurance, or PMI, then your loan is an FHA loan. You can also look at your closing statement. If the ledge shows an “FHA fee,” then the loan is an FHA loan. FHA loans usually have a 3% down payment, so they are popular with first-time home buyers. Private Mortgage Insurance usually costs $35-$100/month in Minnesota right now.
After the sheriff’s sale, a homeowner in Minnesota still gets 6 months to live in the house. This 6 months is called the redemption period. At the end of the 6 months, the loan company gets the right to evict the homeowner if they haven’t left yet. Because evictions ARE halted in Minnesota right now, foreclosures won’t necessarily result in becoming homeless immediately.
WHAT HAPPENS AFTER SEPTEMBER 11, 2020?
The executive orders last as long as there is a state of emergency from the Coronavirus. They have been extended in the past. Because there is no vaccine yet, and there are more cases everyday of the virus, especially in the nearby Dakotas and Iowa, the state of emergency will probably be extended.
If it isn’t extended, and you are in danger of garnishment foreclosure, or eviction, then call us! We offer a free 1 on 1 attorney conference 100% by phone to see if bankruptcy can help. Remember, nothing in the legal world happens immediately, so call now! The more time we have to work on your case, the better results we will get. The best way to get a free conference is to call us at 612-824-4357.