Minnesotans dealing with medical debt now have enhanced protections thanks to the Debt Fairness Act, signed by Governor Tim Walz. This significant legislation introduces crucial safeguards for individuals struggling with medical expenses, ensuring they are treated with fairness and dignity.
Key features of the Debt Fairness Act include:
- Prohibiting the automatic transfer of medical debt to a spouse.
- Banning the reporting of medical debt to credit bureaus.
- Preventing the denial of necessary medical care due to unpaid bills.
Minnesota Attorney General Keith Ellison praised the act, stating, “We all agree that if you borrow money, you should pay it back. We also all agree that we shouldn’t punish people for getting sick. A debt-collection system that makes it harder for people to pay back what they owe does nobody any good. And we also agree that debt collection shouldn’t create more debt.”
Additional reforms under the act:
- Income-based garnishment rates ranging from 10% to 25%, replacing the previous flat rate of 25%.
- Extending wage garnishment protections to all residents and workers in Minnesota.
- This transformative legislation garnered widespread support, including from religious leaders, as it progressed through the Minnesota Legislature.
New Exemptions Under the MN Debt Fairness Act
This is a significant development for our clients as it will allow us to protect more personal property under the Minnesota State exemption scheme—particularly for those who own homes.
Summary of the changes going into effect:
- $1,500 “Wild Card Exemption” that can be applied to protect any property, including funds in a bank account (MN 550.37(28)).
- Vehicle protection increased from $5,000 to $10,000 with enhanced protection for:
-Disability-equipped vehicles: $100,000.
-Vehicles used by or for a person with a mobility disability: $25,000.
-Work vehicles: $12,500 (MN 550.37(12a)). - Personal electronic devices like smartphones, computers, and tablets (MN 550.37(4)), as well as protection for personal jewelry up to $3,062.50—not just a wedding ring exclusion.
- $3,000 for household tools like snowblowers and lawnmowers (MN 550.37(27)).
- $2,000 for sacred possessions like the Bible, Torah, Qur’an, prayer rug, and other religious items (MN 550.37(2)).
- $2,000 for musical instruments (MN 550.37(2b)).
- $1,000 for family pets (MN 550.37(2c)).
- $750 for books (MN 550.37(2a)).
- Protection of federal or state tax credits received by eligible low-income taxpayers, including, but not limited to, the earned income tax credit, the Minnesota working family credit, and renter’s credit (MN 550.37(14)).
- Protection of money received in personal injury cases (MN 550.39).
At Walker & Walker Law, we are dedicated to promoting fairness and justice for our clients. We understand that financial hardships can happen to anyone, and our mission is to provide compassionate, effective legal solutions to help individuals reclaim their financial well-being. Our unwavering commitment to fairness drives us to fight for the rights of those burdened by debt, ensuring they receive the protection and support they deserve.
Whether it’s navigating bankruptcy, defending against unfair debt collection practices, or providing legal guidance on financial matters, Walker & Walker Law stands as a steadfast advocate for equitable treatment and a brighter financial future for all.
