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The Debt Fairness Act
New Law in MN: The Debt Fairness Act
A new law was recently passed in the state of Minnesota that aims to help those struggling with medical debt. Governor Tim Walz signed the Minnesota Debt Fairness Act into law in May 2024, and the different portions of the bill will take effect in later 2024 and 2025. If you’re indebted to a healthcare provider, this law may help to ease your financial burden.
How the Minnesota Debt Fairness Act Impacts Medical Debt
The Minnesota Debt Fairness Act reforms the means through which medical debt can be collected, limits wage garnishment as a result of medical debt, and creates new exemptions for those who are filing for bankruptcy. The specific reforms of this new law that will go into effect on October 1, 2024 are:
- It is now illegal to automatically transfer medical debt to the spouse of a patient.
- Healthcare providers can no longer report medical debt to credit bureaus.
- Your healthcare provider cannot deny any care that is medically necessary on the grounds of your unpaid medical debt.
- Exemptions are established to protect Minnesotans who are in the process of filing for bankruptcy due to debt. Vehicles, household tools, religious items, electronics, and other property are now protected from collectors.
On April 1, 2025, the portion of the law impacting wage garnishment will become effective. Previously, there was a 25% cap on wage garnishment to collect for medical debts. Per the Debt Fairness Act, this cap is now dependent on a person’s income, and will range from 10% to 25% based on their total income.
Learn More About the New Debt Fairness Act
If you’ve been struggling financially or had concerns about future expenses due to medical debt, the Minnesota Debt Fairness Act may provide much-needed relief. To learn more about how this new law may be beneficial to you, reach out to Heller & Thyen today. Our attorneys would be happy to meet with you and discuss the Debt Fairness Act.
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