Minnesota Debt Relief Programs: Free Help and the Debt Fairness Act

How Minnesota debt relief programs work

Minnesota has no agency that buys or forgives personal debt. Ads that promise a "Minnesota debt relief program" are from private companies, and some charge high fees for things you can do for free. What the state does have is a strong legal framework that limits what creditors can take and how debt companies can operate.

Help usually comes from four places. Nonprofit credit counselors set up repayment plans with lower interest rates. Registered settlement companies, or you yourself, negotiate lump-sum payoffs. The federal bankruptcy court for the District of Minnesota handles Chapter 7 and Chapter 13 cases. And state exemption laws decide what a creditor can actually collect after it wins in court. For many families, the last piece is the most important, because it shows whether paying a company to negotiate even makes sense.

If debt is one part of a bigger crisis, our guide to Minnesota hardship relief lists help with rent, food, and emergency costs that can free up money for bills.

What the Debt Fairness Act changed

The Debt Fairness Act was part of the 2024 commerce law, Laws 2024, chapter 114. Most of its medical debt rules took effect on October 1, 2024. The wage garnishment changes apply to cases started on or after April 1, 2025.

The law also requires providers to post their medical debt collection policy. If you are fighting a hospital bill, ask for that policy and for a financial assistance application. Our guide to medical debt and hospital bill financial assistance explains how charity care can cut a bill before it goes to collections.

Fee caps for debt management and settlement firms

Minnesota regulates both kinds of debt companies through the Department of Commerce. Any company that offers these services to Minnesota residents must be registered, whether or not it has an office in the state.

• Debt management plans (Minn. Stat. chapter 332A): the provider may charge a one-time setup fee of no more than $50 and a monthly fee of no more than 15% of your monthly payment or $75, whichever is less. At least 85% of each payment must go to your creditors. Read section 332A.13.
• Debt settlement (chapter 332B): total fees may not exceed 15% of the enrolled debt, or 30% of the savings the company actually negotiates. No fee may be collected until the settlement work in the agreement is done. Read section 332B.09.

Collection agencies also need a Minnesota license from Commerce. Before you sign with any company, look up its registration on the department's licensing page. The National Foundation for Credit Counseling lists nonprofit agencies that serve Minnesota, and our debt management plan guide explains how those plans work.

Tiered limits on wage garnishment

Under Minn. Stat. 571.922, a creditor can garnish the lesser of two amounts: a percentage of your disposable earnings (pay after required deductions) that depends on your weekly income, or the amount by which your disposable earnings exceed 40 times the minimum wage. The law uses the higher of the federal rate ($7.25) or the Minnesota rate, which the Department of Labor and Industry sets at $11.41 an hour for 2026.

An example: a Rochester worker who takes home $600 a week falls in the 10% tier. Ten percent is $60, and the amount over $456.40 is $143.60, so at most $60 can be garnished. Before the 2025 change, the same worker could have lost $143.60 a week. The state minimum wage rises to $11.87 on January 1, 2027, which lifts the protected amount to $474.80 a week.

Child support garnishments follow different, higher limits. Wages of a person receiving need-based public assistance are fully exempt, which leads to the next section.

Bank accounts and benefits that creditors cannot take

A creditor with a judgment can freeze money in your bank account, but Minnesota law protects many kinds of income. Under Minn. Stat. 550.37, all need-based government assistance is exempt, along with the earnings of anyone who receives it. That list includes MFIP, SSI, Medical Assistance, MinnesotaCare, SNAP, energy assistance, and general assistance. Social Security, unemployment, and veterans' benefits are protected as well.

According to LawHelpMN's garnishment fact sheet, only two protections are automatic: the low-earner paycheck floor and directly deposited federal benefits up to two months' worth. Everything else must be claimed. When an account is frozen, you get an exemption notice and form. The money is held for 14 days, so fill out the form and return it to the creditor's attorney right away.

Minnesota does not yet have a general dollar amount that protects any bank balance. An early version of the Debt Fairness Act would have protected several thousand dollars, but that piece is not in the enacted law, and a later bill to protect $1,000 had not passed as of November 2026. In bankruptcy, a new wildcard lets you protect $1,650 of any property, including money in a bank account.

Homestead and other property exemptions

Minnesota adjusts most exemption amounts every two years. The Department of Commerce published new dollar amounts effective July 1, 2026, and the next change is due July 1, 2028.

The homestead figure is one of the largest in the country, which is why many Minnesota homeowners can file Chapter 7 and keep their house. If you are behind on the mortgage itself, see our Minnesota mortgage relief program guide.

Six years to sue, with no restarting the clock

Minnesota gives creditors six years to sue on consumer debt for personal, family, or household purposes. What sets the state apart is the second sentence of Minn. Stat. 541.053: once the six years run out, the deadline is not revived by a payment, a bankruptcy discharge, or an oral or written promise to pay.

In many states, a small "good faith" payment on an old card restarts the clock. In Minnesota it does not. That makes it safer to talk with a collector about a very old account. Still, if you are sued on a debt you believe is older than six years, file an answer and raise the time limit. A court will not always raise it for you.

Legal aid, complaints, and bankruptcy court

Before filing bankruptcy, you must take a short course from a U.S. Trustee-approved agency. Many of those agencies also offer free budget reviews.

Related guides

• Minnesota assistance programs
• Wisconsin debt relief programs
• Iowa debt relief programs
• North Dakota debt relief

Frequently asked questions

This guide shares general information, not legal or financial advice. Minnesota's dollar amounts change on a set schedule, and how the law applies depends on your circumstances. For advice on your own case, contact a legal aid office or a licensed Minnesota attorney. National Relief Program is an independent website, not a government agency.