HF 80

3rd Engrossment - 88th Legislature (2013 - 2014) Posted on 05/18/2013 03:55pm

A bill for an act
relating to judgments; regulating assigned consumer debt default judgments;
providing a limitation period to bring an action arising out of consumer debt;
setting the bail amount for failure to comply with judgment debtor disclosure
requirements in consumer debt cases; amending Minnesota Statutes 2012,
sections 491A.02, subdivision 9; 550.011; 588.04; proposing coding for new law
in Minnesota Statutes, chapters 541; 548.

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

Section 1.

Minnesota Statutes 2012, section 491A.02, subdivision 9, is amended to read:

Subd. 9.

Judgment debtor disclosure.

Notwithstanding any contrary provision in
rule 518 of the Conciliation Court Rules, unless the parties have otherwise agreed, if a
conciliation court judgment or a judgment of district court on removal from conciliation
court has been docketed in district court, the judgment creditor's attorney as an officer of
the court may or the district court in the county in which the judgment originated shall,
upon request of the judgment creditor, order the judgment debtor to mail to the judgment
creditor information as to the nature, amount, identity, and locations of all the debtor's
assets, liabilities, and personal earning. The information must be provided on a form
prescribed by the Supreme Court, and the information shall be sufficiently detailed to
enable the judgment creditor to obtain satisfaction of the judgment by way of execution
on nonexempt assets and earnings of the judgment debtor. The order must contain a
notice that failure to complete the form and mail it to the judgment creditor within ten
days after service of the order may result in a citation for civil contempt of court. Cash
bail posted as a result of being cited for civil contempt of court order under this section
may be ordered payable to the creditor to satisfy the judgment, either partially or fully new text begin ,
subject to section 588.04, paragraph (b) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2013.
new text end

Sec. 2.

new text begin [541.053] LIMITATION OF ACTIONS BASED ON CONSUMER DEBT.
new text end

new text begin Notwithstanding section 541.31, subdivision 1, actions upon an obligation arising
out of a consumer debt primarily for personal, family, or household purposes shall be
commenced within six years. After its expiration, the statute of limitations is not revived
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 EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2013.
new text end

Sec. 3.

new text begin [548.101] ASSIGNED CONSUMER DEBT DEFAULT JUDGMENTS.
new text end

new text begin (a) A party entitled to a judgment by default in a conciliation court or district court
action upon an assigned obligation arising out of any consumer debt that is primarily for
personal, family, or household purposes and in default at the time of assignment shall apply
to the court and submit, in addition to the request, application, or motion for judgment:
new text end

new text begin (1) a copy of the written contract between the debtor and original creditor or, if no
written contract exists, other admissible evidence establishing the terms of the account
relationship between the debtor and the original creditor, including the moving party's
entitlement to the amounts described in clause (4). If only the balance owed at the time
the debt was charged off or first assigned is claimed to be owed, evidence may include
a monthly or periodic billing statement;
new text end

new text begin (2) admissible evidence establishing that the defendant owes the debt;
new text end

new text begin (3) the last four numbers of the debtor's Social Security number, if known;
new text end

new text begin (4) admissible evidence establishing that the amount claimed to be owed is accurate,
including the balance owed at the time the debt was charged off or first assigned to another
party by the original creditor and, if included in the request, application, or motion for
judgment, a breakdown of any fees, interest, and charges added to that amount;
new text end

new text begin (5) admissible evidence establishing a valid and complete chain of assignment of the
debt from the original creditor to the party requesting judgment, including documentation
or a bill of sale evidencing the assignment with evidence that the particular debt at issue
was included in the assignment referenced in the documentation or bill of sale;
new text end

new text begin (6) in district court cases, proof that a summons and complaint were properly served
on the debtor and that the debtor did not serve a timely answer or, in conciliation court
cases, proof that the party seeking the judgment or the party's attorney used reasonable
efforts to provide the court administrator with the correct address for the debtor; and
new text end

new text begin (7) in district court cases, proof that the party requesting the default judgment or
the party's attorney mailed a notice of intent to apply for default judgment to the debtor.
The notice must be mailed to the debtor at the debtor's last known address at least 14
days before the request, application, or motion for default, and must be substantially in
the following form:
new text end

new text begin Notice of Intent to Apply for Default Judgment new text end			new text begin Case Type - Consumer Credit Contract new text end
new text begin STATE OF MINNESOTA new text end				new text begin DISTRICT COURT new text end
new text begin COUNTY OF . new text end				new text begin . JUDICIAL DISTRICT new text end
.	new text begin Plaintiff, new text end			new text begin NOTICE OF INTENT TO APPLY FOR DEFAULT JUDGMENT new text end
new text begin vs. new text end
.	new text begin Defendant. new text end			new text begin Court File No. . new text end
new text begin _______ new text end new text begin [Plaintiff] has sued you to collect the following consumer debt that you originally owed to ______ [original creditor]: new text end
new text begin _______ new text end new text begin [original creditor] new text end
new text begin _______ new text end new text begin [last four digits of the debtor's account number] new text end
new text begin _______ new text end new text begin [amount of debt] new text end
new text begin _______ new text end new text begin [date of charge off or account closing date] new text end
new text begin _______ [Plaintiff] served this lawsuit on you on _______ [date]. Under Minnesota law, a lawsuit may be started against you even though it has not yet been filed in court and the court has no record of this lawsuit or this paperwork. You are in default because you did not serve a written Answer on time. _______ [Plaintiff] will ask the Court to enter a judgment against you without any further court proceedings, unless you mail a written Answer or written response contesting the debt within 14 days from the date below. A judgment is a court order that you must pay a certain amount of money. new text end
new text begin Dated: new text end .				new text begin LAW FIRM, P.A. new text end
				.
				new text begin Attorney Name, ID# new text end
				new text begin Address new text end
				new text begin Phone new text end

new text begin (b) If admissible, the same item of evidence or document may be provided to satisfy
more than one requirement under paragraph (a), clauses (1) to (5). A court may permit the
foundation for documents submitted under paragraph (a) to be established by an affidavit.
new text end

new text begin (c) Except in conciliation court cases or if a hearing is required under court rules,
the court may either:
new text end

new text begin (1) hold a hearing before entry of a default judgment; or
new text end

new text begin (2) enter an administrative default judgment without a hearing if the court determines
that the evidence submitted satisfies the requirements of paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective September 1, 2013, and applies to
requests, applications, and motions for default judgments and conciliation court cases
filed on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2012, section 550.011, is amended to read:

550.011 JUDGMENT DEBTOR DISCLOSURE.

Unless the parties have otherwise agreed, if a judgment has been docketed in district
court for at least 30 days, and the judgment is not satisfied, the judgment creditor's attorney
as an officer of the court may or the district court in the county in which the judgment
originated shall, upon request of the judgment creditor, order the judgment debtor to mail
by certified mail to the judgment creditor information as to the nature, amount, identity,
and locations of all the debtor's assets, liabilities, and personal earnings. The information
must be provided on a form prescribed by the Supreme Court, and the information shall be
sufficiently detailed to enable the judgment creditor to obtain satisfaction of the judgment
by way of execution on nonexempt assets and earnings of the judgment debtor. The order
must contain a notice that failure to complete the form and mail it to the judgment creditor
within ten days after service of the order may result in a citation for civil contempt of
court. Cash bail posted as a result of being cited for civil contempt of court order under
this section may be ordered payable to the creditor to satisfy the judgment, either partially
or fully new text begin , subject to section 588.04, paragraph (b) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 588.04, is amended to read:

588.04 ARREST; ORDER TO SHOW CAUSE.

new text begin (a) new text end In cases of constructive contempt, an affidavit of the facts constituting the
contempt shall be presented to the court or officer, who may either issue a warrant of arrest
to bring the person charged to answer or, without a previous arrest, upon notice, or upon
an order to show cause, which may be served by a sheriff or other officer in the same
manner as a summons in an action, may commit the person to jail, impose a fine, or both,
and make such order thereupon as the case may require.

new text begin (b) When the underlying case involves an obligation arising out of a consumer debt
primarily for personal, family, or household purposes, and the contempt is a failure to
comply with judgment debtor disclosure requirements under section 491A.02, subdivision
9, or 550.011, bail must be set at $50. For a subsequent contempt for a failure to disclose in
the same action, bail must be an amount set by the court after considering aggravating and
mitigating factors. Bail posted under this section must be returned to the judgment debtor.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2013.
new text end