Debt Collectors Use Pocket Service Laws For No-Courts-Required, Insta-Garnishment!

In Minnesota, debt collectors can send a garnishment request directly to your bank and start snatching your dollars without even having through a court of a law.

MN’s “pocket service” laws allow you to initiate a lawsuit without filing it in a court. Debt collectors need only serve the summons and the complaint and the pre-judgment garnishment fun begins. (What is “pocket service” and pre-judgment? Read here).

It’s then up to the alleged debtor to disprove the claim if you want your money back. Caveat Emptor’s Sam Glover says that sometimes, these debts can’t even be collected under the law, or are only backed up by the flimsiest of evidence.

“Then, if the debtor wants to challenge the garnishment, the fact that the summons was served by hiding it in a bush down the street, or the fact that their bank account is full of exempt funds, they have to pay to file the case in district court.”

Whatever happened to innocent until proven guilty? Sam says, “It isn’t criminal, so that doesn’t apply.” — BEN POPKEN

The debt collector v. the widow [Caveat Emptor]

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  1. timmus says:

    That’s really scary considering a lot of big corporations do not deal with consumers honestly to begin with.

  2. ElizabethD says:

    Please do not post photos of yummy food like that salmon just before my lunch time, or I will need earplugs to drown out my tummy-growling. Thanks!

  3. Greasy Thumb Guzik says:

    I’m no lawyer, but doesn’t this violate the Seventh Amendment?

    “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

  4. Sam Glover says:

    @Greasy Thumb Guzik: No, because the defendant still has a right to trial by jury. The lawsuit would have to be filed by that point, of course. There is only so much you can get done without going to court.

  5. shdwsclan says:

    Well, as said, if its greater than $20 then a trial is required for garnishment. But still, thats enough to keep your funds in a foreign bank like me…

  6. Sam Glover says:

    There is no requirement of trial before garnishment, especially if the defendant does not show up to defend herself. Pre-judgment garnishment in Minnesota is permissible if the plaintiff can show she is entitled to a default, so the jury issue doesn’t arise.

    I don’t think there is anything legally wrong with the pocket service/pre-judgment garnishment rules. In effect, however, they do a lot of damage to consumers, especially when used by debt collectors not particularly interested in giving defendants a fair chance to defend themselves.

  7. Brad2723 says:

    Isn’t it still a basic foundation of American law that it is not the burden of the defendant to prove his or her innocence, rather it is the burden of the accuser to prove the defendant’s guilt?
    If the debt collector wants his money bad enough, he should be made to argue the case before a judge, not be granted judgment until the accused is proved innovent.

  8. clarity says:

    Sam cites an excellent WSJ article – it is unbelievable that banks claim not to be able to discern the source of your money when it suits them and take exempt money to pay themselves all the time. And will not help customers in the least way to protect themselves from illegal garnishment by outside entities. An elderly person has to secure a lawyer to protect money from being taken that’s already legally protected? And how would he or she get an attorney with a garnished bank account? This is a huge problem with the government effort to pay only by direct deposit…you have little recourse when things go wrong with your bank.

  9. pestie says:

    @Greasy Thumb Guzik: Haven’t you heard? The Constitution is just a “goddamn piece of paper.” Our President said so; it must be true!

  10. a_m_m_b says:

    anyone know where to research other State’s take on this matter?

  11. Sam Glover says:

    @Brad2723: “Innocent until proven guilty,” to the extent it actually is a basic tenet of American law anymore, applies only to criminal proceedings. Debt collection is civil law.

    To answer more directly, yes, a debtor has the right to be heard before a court and by a jury. But only if the debtor answers the lawsuit. In many cases, debtors fail to show up. If you don’t show up to defend yourself in criminal court, you are arrested. If you don’t show up to defend yourself in civil court, you lose.

    I posted the summary of pocket service mostly because so many people go on about calling the court to see if there is really a lawsuit against you. In pocket service states like Minnesota, this doesn’t work. The lawsuit starts when a defendant is served, not when it is filed with the court.

    Of course, a lot of this goes out the window when debt collectors don’t bother to serve a defendant correctly. In those cases, the defendant probably will not know about the lawsuit until their account or wages are garnished, at which point they will have to pay to file the lawsuit and undo the judgment (if there is one), garnishment, etc.

    In those cases, yes, legal principles are violated. The Catch 22 is that you can’t do anything about it unless you somehow find out about it, at which point it may be effectively too late.

  12. Sam Glover says:

    @a_m_m_b: You might have to go state-by-state, but you could probably do so without too much trouble. If you do, I’d love a copy of your findings.