HF 2996

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/08/2010 01:21pm

A bill for an act
relating to civil actions; requiring notice and other actions before a civil action or
arbitration proceeding may be commenced to collect a purchased debt; regulating
default judgments; proposing coding for new law in Minnesota Statutes, chapter
544.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [544.43] ACTIONS TO COLLECT PURCHASED DEBT.
new text end

new text begin Subdivision 1. new text end

new text begin Commencement of action or arbitration proceeding to collect
purchased debt. new text end

new text begin (a) No person may commence an action or an arbitration proceeding to
collect a purchased debt, or on behalf of a person owning a purchased debt, unless the
person provides an "Intent to Commence a Lawsuit" notice to the debtor at least 30 days
in advance of commencement, containing:
new text end

new text begin (1) a heading, in bold type, in at least 18-point font, reading "Intent to File Lawsuit;"
new text end

new text begin (2) notice that the person intends to file a lawsuit to collect the purchased debt;
new text end

new text begin (3) the name, address, and telephone number of the person;
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new text begin (4) proof of the ownership of the specific debt instrument or account at issue;
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new text begin (5) the name of the original creditor;
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new text begin (6) the debtor's original account number;
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new text begin (7) a copy of the contract or other document evidencing the debt;
new text end

new text begin (8) an itemized accounting of all amounts claimed to be owed and a record of all
payments and how the balance owed has been computed; and
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new text begin (9) in bold type, prominently displayed in a font size larger than the other text,
the following verbatim statement:
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new text begin (i) "If you believe you do not owe this debt or that any of the information contained
in this notice is inaccurate, you have the right to dispute this debt. You must send your
dispute IN WRITING to (insert address) and provide the reasons for the dispute; and
new text end

new text begin (ii) you cannot be sued to collect a debt if too much time has passed after you first
incurred the debt or after the date you made your last payment. If you are sued, you should
talk to a lawyer to make sure that the time within which you can be sued has not run out."
new text end

new text begin (b) No person may commence an action or an arbitration proceeding to collect a
purchased debt, or on behalf of a person owning a purchased debt:
new text end

new text begin (1) within the 30-day period provided in paragraph (a);
new text end

new text begin (2) if the person receives written notice from the debtor that the debt is disputed,
until the person investigates the reasons stated by the debtor for disputing the debt and
responds in writing to each of the reasons stated; or
new text end

new text begin (3) if the applicable statute of limitations period for commencing the action or
arbitration proceeding has expired.
new text end

new text begin (c) No person may commence an action or an arbitration proceeding to collect
a purchased debt, or on behalf of a person owning a purchased debt, unless the person
attaches to the summons and complaint:
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new text begin (1) a copy of the assignment or other writing establishing that the person is the
owner of the debt or the person is collecting on behalf of the owner of the debt. If the
debt has been assigned more than once, then each assignment or other writing evidencing
transfer of ownership must be attached to establish an unbroken chain of ownership. Each
assignment or other writing evidencing transfer of ownership must contain the original
account number of the debt purchased;
new text end

new text begin (2) a copy of the contract or other writing evidencing the original debt, which must
contain a signature of the defendant, or, if no contract exists, an affidavit from the seller,
executed under oath, substantiating the debt; and
new text end

new text begin (3) an affidavit stating the date and amount of the last payment made by the debtor
and the name and address of the person or persons to whom the payment was made.
new text end

new text begin Subd. 2. new text end

new text begin Effect of certain activities on statute of limitations. new text end

new text begin The statute of
limitations is not revived or tolled by the collection of a payment on an account, a
discharge in a bankruptcy proceeding, or an oral or written reaffirmation of the debt.
new text end

new text begin Subd. 3. new text end

new text begin Default judgment. new text end

new text begin A default judgment may not be entered regarding
purchased debt unless the person has filed with the court:
new text end

new text begin (1) the documents required to be submitted with the summons and complaint under
subdivision 1, paragraph (c);
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new text begin (2) properly authenticated business records sufficient to establish the defendant in
fact is the debtor and the amount and nature of the debt;
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new text begin (3) the original account number;
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new text begin (4) the original creditor;
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new text begin (5) the amount of the original debt;
new text end

new text begin (6) an itemization of charges and fees claimed to be owed;
new text end

new text begin (7) the original charge-off balance, or, if the balance has not been charged off, an
explanation of how the balance was calculated;
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new text begin (8) an itemization of postcharge-off additions, where applicable;
new text end

new text begin (9) the date of last payment;
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new text begin (10) a record of all payments and how the balance was computed; and
new text end

new text begin (11) the amount of interest claimed and the basis for the interest charged.
new text end

new text begin Subd. 4. new text end

new text begin Remedies. new text end

new text begin (a) A person who violates this section is liable to the debtor for:
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new text begin (1) actual, statutory, incidental, and consequential damages; and
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new text begin (2) costs, disbursements, and reasonable attorney fees.
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new text begin (b) The court shall award the following statutory damages:
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new text begin (1) $2,500 for a violation of subdivision 1, paragraph (a) or (b); or
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new text begin (2) $5,000 for a violation of subdivision 1, paragraph (c).
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new text begin (c) A debtor may sue for a declaratory judgment or for temporary or permanent
injunctive or other equitable relief. A court must grant injunctive relief on a showing
that the defendant has violated any provision under subdivision 1, or in the case of a
temporary injunction, on a showing that the debtor is likely to prevail on allegations that
the defendant has violated any provision under subdivision 1.
new text end

new text begin (d) A person who violates any provision of subdivision 1 is liable to the named
plaintiffs in a class action for the amount that each named plaintiff could recover under
this subdivision and to the other class members for such amount as the court may allow.
new text end

new text begin (e) A person filing a false affidavit is liable for a civil fine of $5,000.
new text end

new text begin (f) The remedies in this subdivision are cumulative.
new text end