HF 80

1st Unofficial Engrossment - 88th Legislature (2013 - 2014)

Posted on 05/17/2013 08:42 p.m.

1.1A bill for an act 1.2relating to judgments; regulating assigned consumer debt default judgments; 1.3providing a limitation period to bring an action arising out of consumer debt; 1.4setting the bail amount for failure to comply with judgment debtor disclosure 1.5requirements in consumer debt cases;amending Minnesota Statutes 2012, 1.6sections 491A.02, subdivision 9; 550.011; 588.04; proposing coding for new law 1.7in Minnesota Statutes, chapters 541; 548. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9    Section 1. Minnesota Statutes 2012, section 491A.02, subdivision 9, is amended to read: 1.10    Subd. 9. Judgment debtor disclosure. Notwithstanding any contrary provision in 1.11rule 518 of the Conciliation Court Rules, unless the parties have otherwise agreed, if a 1.12conciliation court judgment or a judgment of district court on removal from conciliation 1.13court has been docketed in district court, the judgment creditor's attorney as an officer of 1.14the court may or the district court in the county in which the judgment originated shall, 1.15upon request of the judgment creditor, order the judgment debtor to mail to the judgment 1.16creditor information as to the nature, amount, identity, and locations of all the debtor's 1.17assets, liabilities, and personal earning. The information must be provided on a form 1.18prescribed by the Supreme Court, and the information shall be sufficiently detailed to 1.19enable the judgment creditor to obtain satisfaction of the judgment by way of execution 1.20on nonexempt assets and earnings of the judgment debtor. The order must contain a 1.21notice that failure to complete the form and mail it to the judgment creditor within ten 1.22days after service of the order may result in a citation for civil contempt of court. Cash 1.23bail posted as a result of being cited for civil contempt of court order under this section 1.24may be ordered payable to the creditor to satisfy the judgment, either partially or fully new text begin , new text end 1.25 new text begin subject to section 588.04, paragraph (b) new text end . 2.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2013. new text end 2.2    Sec. 2. new text begin [541.053] LIMITATION OF ACTIONS BASED ON CONSUMER DEBT. new text end 2.3 new text begin Notwithstanding section 541.31, subdivision 1, actions upon an obligation arising new text end 2.4 new text begin out of a consumer debt primarily for personal, family, or household purposes shall be new text end 2.5 new text begin commenced within six years. After its expiration, the statute of limitations is not revived new text end 2.6 new text begin by the collection of a payment on an account, a discharge in a bankruptcy proceeding, or new text end 2.7 new text begin an oral or written reaffirmation of the debt. new text end 2.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2013. new text end 2.9    Sec. 3. new text begin [548.101] ASSIGNED CONSUMER DEBT DEFAULT JUDGMENTS. new text end 2.10 new text begin (a) A party entitled to a judgment by default in a conciliation court or district court new text end 2.11 new text begin action upon an assigned obligation arising out of any consumer debt that is primarily for new text end 2.12 new text begin personal, family, or household purposes and in default at the time of assignment shall apply new text end 2.13 new text begin to the court and submit, in addition to the request, application, or motion for judgment: new text end 2.14 new text begin (1) a copy of the written contract between the debtor and original creditor or, if no new text end 2.15 new text begin written contract exists, other admissible evidence establishing the terms of the account new text end 2.16 new text begin relationship between the debtor and the original creditor, including the moving party's new text end 2.17 new text begin entitlement to the amounts described in clause (4). If only the balance owed at the time new text end 2.18 new text begin the debt was charged off or first assigned is claimed to be owed, evidence may include new text end 2.19 new text begin a monthly or periodic billing statement; new text end 2.20 new text begin (2) admissible evidence establishing that the defendant owes the debt; new text end 2.21 new text begin (3) the last four numbers of the debtor's Social Security number, if known; new text end 2.22 new text begin (4) admissible evidence establishing that the amount claimed to be owed is accurate, new text end 2.23 new text begin including the balance owed at the time the debt was charged off or first assigned to another new text end 2.24 new text begin party by the original creditor and, if included in the request, application, or motion for new text end 2.25 new text begin judgment, a breakdown of any fees, interest, and charges added to that amount; new text end 2.26 new text begin (5) admissible evidence establishing a valid and complete chain of assignment of the new text end 2.27 new text begin debt from the original creditor to the party requesting judgment, including documentation new text end 2.28 new text begin or a bill of sale evidencing the assignment with evidence that the particular debt at issue new text end 2.29 new text begin was included in the assignment referenced in the documentation or bill of sale; new text end 2.30 new text begin (6) in district court cases, proof that a summons and complaint were properly served new text end 2.31 new text begin on the debtor and that the debtor did not serve a timely answer or, in conciliation court new text end 2.32 new text begin cases, proof that the party seeking the judgment or the party's attorney used reasonable new text end 2.33 new text begin efforts to provide the court administrator with the correct address for the debtor; and new text end 3.1 new text begin (7) in district court cases, proof that the party requesting the default judgment or new text end 3.2 new text begin the party's attorney mailed a notice of intent to apply for default judgment to the debtor. new text end 3.3 new text begin The notice must be mailed to the debtor at the debtor's last known address at least 14 new text end 3.4 new text begin days before the request, application, or motion for default, and must be substantially in new text end 3.5 new text begin the following form: new text end 3.6 3.7 new text begin Notice of Intent to Apply for new text end new text begin Default Judgment new text end new text begin Case Type - Consumer Credit Contract new text end 3.8 new text begin STATE OF MINNESOTA new text end new text begin DISTRICT COURT new text end 3.9 new text begin COUNTY OF new text end ..... ..... new text begin JUDICIAL DISTRICT new text end 3.10 3.11 ..... new text begin Plaintiff, new text end new text begin NOTICE OF INTENT TO APPLY new text end new text begin FOR DEFAULT JUDGMENT new text end 3.12 new text begin vs. new text end 3.13 ..... new text begin Defendant. new text end new text begin Court File No. new text end ..... 3.14 3.15 new text begin _______ new text end new text begin [Plaintiff] has sued you to collect the following consumer debt that you new text end new text begin originally owed to ______ [original creditor]: new text end 3.16 new text begin _______ new text end new text begin [original creditor] new text end 3.17 new text begin _______ new text end new text begin [last four digits of the debtor's account number] new text end 3.18 new text begin _______ new text end new text begin [amount of debt] new text end 3.19 new text begin _______ new text end new text begin [date of charge off or account closing date] new text end 3.20 3.21 3.22 3.23 3.24 3.25 3.26 new text begin _______ [Plaintiff] served this lawsuit on you on _______ [date]. Under Minnesota law, new text end new text begin a lawsuit may be started against you even though it has not yet been filed in court and new text end new text begin the court has no record of this lawsuit or this paperwork. You are in default because you new text end new text begin did not serve a written Answer on time. _______ [Plaintiff] will ask the Court to enter a new text end new text begin judgment against you without any further court proceedings, unless you mail a written new text end new text begin Answer or written response contesting the debt within 14 days from the date below. A new text end new text begin judgment is a court order that you must pay a certain amount of money. new text end 3.27 new text begin Dated: new text end ..... new text begin LAW FIRM, P.A. new text end 3.28 ..... 3.29 3.30 new text begin Attorney Name, new text end new text begin ID# new text end 3.31 new text begin Address new text end 3.32 new text begin Phone new text end 3.33 new text begin (b) If admissible, the same item of evidence or document may be provided to satisfy new text end 3.34 new text begin more than one requirement under paragraph (a), clauses (1) to (5). A court may permit the new text end 3.35 new text begin foundation for documents submitted under paragraph (a) to be established by an affidavit. new text end 3.36 new text begin (c) Except in conciliation court cases or if a hearing is required under court rules, new text end 3.37 new text begin the court may either: new text end 3.38 new text begin (1) hold a hearing before entry of a default judgment; or new text end 3.39 new text begin (2) enter an administrative default judgment without a hearing if the court determines new text end 3.40 new text begin that the evidence submitted satisfies the requirements of paragraph (a). new text end 4.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective September 1, 2013, and applies to new text end 4.2 new text begin requests, applications, and motions for default judgments and conciliation court cases new text end 4.3 new text begin filed on or after that date. new text end 4.4    Sec. 4. Minnesota Statutes 2012, section 550.011, is amended to read: 4.5550.011 JUDGMENT DEBTOR DISCLOSURE. 4.6Unless the parties have otherwise agreed, if a judgment has been docketed in district 4.7court for at least 30 days, and the judgment is not satisfied, the judgment creditor's attorney 4.8as an officer of the court may or the district court in the county in which the judgment 4.9originated shall, upon request of the judgment creditor, order the judgment debtor to mail 4.10by certified mail to the judgment creditor information as to the nature, amount, identity, 4.11and locations of all the debtor's assets, liabilities, and personal earnings. The information 4.12must be provided on a form prescribed by the Supreme Court, and the information shall be 4.13sufficiently detailed to enable the judgment creditor to obtain satisfaction of the judgment 4.14by way of execution on nonexempt assets and earnings of the judgment debtor. The order 4.15must contain a notice that failure to complete the form and mail it to the judgment creditor 4.16within ten days after service of the order may result in a citation for civil contempt of 4.17court. Cash bail posted as a result of being cited for civil contempt of court order under 4.18this section may be ordered payable to the creditor to satisfy the judgment, either partially 4.19or fully new text begin , subject to section 588.04, paragraph (b) new text end . 4.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2013. new text end 4.21    Sec. 5. Minnesota Statutes 2012, section 588.04, is amended to read: 4.22588.04 ARREST; ORDER TO SHOW CAUSE. 4.23 new text begin (a) new text end In cases of constructive contempt, an affidavit of the facts constituting the 4.24contempt shall be presented to the court or officer, who may either issue a warrant of arrest 4.25to bring the person charged to answer or, without a previous arrest, upon notice, or upon 4.26an order to show cause, which may be served by a sheriff or other officer in the same 4.27manner as a summons in an action, may commit the person to jail, impose a fine, or both, 4.28and make such order thereupon as the case may require. 4.29 new text begin (b) When the underlying case involves an obligation arising out of a consumer debt new text end 4.30 new text begin primarily for personal, family, or household purposes, and the contempt is a failure to new text end 4.31 new text begin comply with judgment debtor disclosure requirements under section 491A.02, subdivision new text end 4.32 new text begin 9, or 550.011, bail must be set at $50. For a subsequent contempt for a failure to disclose in new text end 5.1 new text begin the same action, bail must be an amount set by the court after considering aggravating and new text end 5.2 new text begin mitigating factors. Bail posted under this section must be returned to the judgment debtor. new text end 5.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective August 1, 2013. new text end