Minnesota Consumer Debt Litigation

Minnesota Consumer

Debt Litigation

A STATEWIDE ACCESS

TO JUSTICE REPORT

2023

Minnesota State Bar Association Access to Justice Committee

MINNESOTA CONSUMER DEBT LITIGATION |

Overview

Using state courts to collect debts has become extremely commonplace in the

U.S., and Minnesota is no exception. In 2019, more than half of the cases ﬁled

in the state’s civil courts involved consumer debt. But court processes and

procedures in the state weren’t designed with unrepresented consumers in debt

litigation in mind, and they haven’t shifted to reﬂect the current reality. Minnesota

courts are seeing a high volume of debt cases being brought by businesses

against individual consumers who rarely have an attorney’s help.

To better understand the impact of Minnesota debt collection lawsuits, the

Minnesota State Bar Association Access to Justice Committee (ATJ) examined

bulk civil court data, analyzed policies, and conducted interviews in the state. The

Committee, which works to increase access to meaningful, eﬀective assistance

for civil legal needs, was supported by Legal Services State Support, the

Minnesota State Bar Association (MSBA), Minnesota Judicial Branch, January

Advisors Data Science Consulting, and The Pew Charitable Trusts.

The Committee found that current practices—some unique to Minnesota, others

common across the country—have made it diﬃcult for consumers without an

attorney to fully engage in debt litigation, or often to even know that there is a

case against them. On the other hand, the Committee found that the current

system is working well for businesses that turn to the courts to resolve debts.

Confusing and opaque processes, paired with minimal court oversight at key

points, mean that Minnesotans who want to engage in their case and use it as a

ﬁnal opportunity to resolve their debts have no clear path for doing so.

Executive Summary

MINNESOTA CONSUMER DEBT LITIGATION |

Key ﬁndings from this

analysis include:

The current debt litigation landscape has made

it diﬃcult for Minnesota civil courts to realize

their stated vision that “the general public and

those who use the court system will refer to it as

accessible, fair, consistent, responsive, free of

discrimination, independent, and well-managed.”

•• The overwhelming majority of debt cases in

Minnesota—82% of district court cases and 54% of

conciliation court cases —end in default judgment

in favor of the plaintiﬀ.

•• Minnesota has fewer residents in debt than in

most places in the U.S., but more litigious plaintiﬀs,

with 1 in 8 debts in collections eventually ﬁled as

civil court cases.

Executive Summary

Court processes and policies make it diﬃcult

for Minnesota consumers to participate in and

resolve their cases.

•• More than half of debt cases ﬁled in district court

involved less than $4,000, which means they are

eligible to be ﬁled in conciliation court.

• More consumers engage in their lawsuit if

the case is brought in conciliation court than

in district court. Roughly 82% of consumer

debt cases in Minnesota district court end

in default (compared to 54% in conciliation

court), higher than in most states and above

national numbers.

•• Minnesota’s two-venue system for debt litigation

allows plaintiﬀs to choose whether to ﬁle in district

court or conciliation court for matters involving

$4,000 or less. This creates confusion and diﬀerent

outcomes for consumers, almost none of whom are

represented by a lawyer.

• District court allows plaintiﬀs to serve

consumers notice of a lawsuit without ﬁling

in court, creating confusion about the validity

of the matter.

•The oﬃcial process for ﬁling an answer in a

district court case is inconsistent with actual

practice; formal answers are expensive to

ﬁle, resulting in a practice whereby self-

represented consumers send informal

“answers” to plaintiﬀs attorneys, putting the

adverse party in the position of determining

whether the consumer has suﬃciently

answered the claim.

MINNESOTA CONSUMER DEBT LITIGATION |

There are racial and income disparities in

who is being sued in Minnesota.

•• Overall, the rate of debt claims ﬁled against Black

and Latino Minnesotans is more than twice that of

Non-Hispanic White Minnesotans.

•• The ﬁling rate against consumers in

neighborhoods where the median household income

is $50,000 or less per year is 50% higher than

against those in neighborhoods where the median

household income is over $75,000 per year.

The services and protections available to debt

consumers are not reaching enough Minnesotans

or helping people avoid the worst consequences

of debt cases.

•• Most Minnesotans facing debt litigation represent

themselves. They often don’t make enough money to

hire a private attorney but make too much to qualify

for legal aid.

• An estimated 82% of cases are ﬁled

against people who are above the legal aid

income threshold.

• Income requirements for legal aid

services, limited legal aid resources,

and competing priorities for in-demand

services across the legal spectrum meant

Minnesota legal aid served just 3,000 debt-

related cases between 2019 to 2021, out

of approximately 178,000 that were ﬁled in

Minnesota courts during that time.

• The processes for enforcing a

judgment are largely handled by

plaintiﬀs, taking place outside of the

purview of the courts; as a result,

there is limited court data available

to understand the impact of post-

judgment activity on Minnesota

consumers.

Based on these ﬁndings,

the MSBA’s Access to Justice

Committee recommends

that policymakers and

civil justice leaders:

Develop specialized

procedural rules for debt

cases to better manage

consumer debt cases.

Create and improve

resources that empower

self-represented litigants to

participate in their cases.

Preserve economic stability

for debt-burdened Minnesotans,

so they can aﬀord basic needs

while repaying their debts.

Expand services for

lower- and moderate-income

people who are struggling

with debt.

By making debt litigation

processes in Minnesota courts

less confusing and increasing

consumer protections and

resources, the state can cut costs

related to these cases, support

courts in their eﬀorts to process

these matters more eﬀectively,

and help consumers and creditors

reach resolution.

MINNESOTA CONSUMER DEBT LITIGATION |

Dori Rapaport, Chair

Executive Director, Legal Aid Service of Northeastern

Minnesota

Bridget Gernander

Legal Services Grant Manager & Minnesota IOLTA

Program Director, Minnesota Judicial Branch

Gregory Hanson

Associate Attorney, D.S. Erickson & Associates, PLLC

Bennett Hartz

Assistant Attorney General, Minnesota Attorney

General’s Oﬃce

Parker Maertz

Manager, Consumer Action Division, Minnesota

Attorney General’s Oﬃce

Lori Mittag

Conciliation Court Referee, Ramsey County

Workgroup Members

Katy Drahos

Access to Justice Director, Minnesota State Bar

Association / Hennepin County Bar Association /

Ramsey County Bar Association

Ron Elwood

Supervising Attorney, Legal Services Advocacy Project

Bridget Gernander

Legal Services Grant Manager & Minnesota IOLTA

Program Director, Minnesota Judicial Branch

Charles Nguyen

Hennepin County Senior Self-Help Center Specialist,

Minnesota Judicial Branch

Jena Reed

Self-Represented Litigant Program Manager,

Minnesota Judicial Branch

J. Singleton

Program Manager, Minnesota Legal Services State Support

Daniel Wassim

Associate Attorney, Dorsey & Whitney LLP

Jessica Whitney

Deputy Attorney General, Minnesota Attorney

General’s Oﬃce

Lindsay Ziezulewicz

Hennepin County Senior Self-Help Center Specialist,

Minnesota Judicial Branch

Access to Justice Committee Workgroup

Consumer Debt Litigation Project Leadership Team

Melissa Kantola

Deputy District Administrator, Minnesota Judicial Branch

Jena Reed

Self-Represented Litigant Program Manager,

Minnesota Judicial Branch

J. Singleton

Program Manager, Minnesota Legal Services State Support

MINNESOTA CONSUMER DEBT LITIGATION |

Table of Contents

2 • EXECUTIVE SUMMARY

5 • WORKGROUP MEMBERS

6 • TABLE OF CONTENTS

7 • BACKGROUND

15 • RESEARCH FINDINGS

The characteristics of plaintiﬀs, debts, and consumers �� 15

How cases are processed in district and conciliation court �� 23

What happens after court �� 31

35 • RECOMMENDATIONS

Recommendation 1: Develop specialized procedural rules to better

manage consumer debt cases �� 36

Recommendation 2: Expand resources to empower self-represented

litigants to participate in their cases �� 40

Recommendation 3: Preserve economic stability so Minnesotans can

aﬀord basic needs while repaying their debts �� 42

Recommendation 4: Expand services for lower- and moderate-income

people who are struggling with debt �� 44

46 • ACKNOWLEDGMENTS

47 • METHODOLOGY

50 • APPENDIX

52 • ENDNOTES

MINNESOTA CONSUMER DEBT LITIGATION |

Background

Minnesota has an active access to justice community and some good policies

on the books related to consumer debt lawsuits.

For example, the state is

ahead of other states in adopting documentation requirements for debt buyers

and prohibiting revival of debt after the statute of limitations has run. Minnesota

courts also have a strong operational infrastructure. Court staﬀ’s commitment to

training, leveraging resources, and creating detailed process documents means

the day-to-day functions of the courts are well run. Nevertheless, Minnesotans

involved in debt litigation still experience challenges, and consumer debt cases

are ﬂooding Minnesota civil courts.

Minnesota is unusual compared to other states in how little the judiciary

interacts with civil debt cases, and plaintiﬀs in Minnesota have an outsized role

in deciding where their matter is heard, when a case is formally ﬁled, and how

money is collected if they receive a judgment in their favor. The research team

examined data provided by the courts to understand how the courts’ limited

involvement aﬀects court users. The state’s two-venue system for civil matters

involving $4,000 or less, its rules allowing hip pocket

ﬁling (the practice of

commencing a lawsuit upon serving the defendant with the summons, rather

than by ﬁling a claim with the court), for district court matters, and the magnitude

of the plaintiﬀs’ role compared to that of the courts make Minnesota an outlier

among U.S. state civil courts.

In order to understand the scope and impact of debt collection lawsuits on

Minnesotan consumers, the MSBA Access to Justice Committee brought

together a diverse group of stakeholders with experience in Minnesota civil

courts and debt collection lawsuits to provide insight on data analyses and

identify data-informed recommendations to make the courts work better for all

parties involved. Among these stakeholders were judicial oﬃcers, legal services

attorneys, creditors attorneys, private consumer attorneys, consumer advocates

in the attorney general’s oﬃce, and service providers in the following areas:

ﬁnancial counseling, mediation, court-based self-help, and lawyer referral.

MINNESOTA CONSUMER DEBT LITIGATION |

CONCILIATION COURT DISTRICT COURT

File ﬁrst > then serve Serve ﬁrst > then ﬁle

Answer not required.

Hearing automatically scheduled.

Answer generally required for a hearing.

No court-based mechanism to settle before ﬁling. Some cases may be settled before ﬁling.

Judicial oﬃcer enters default judgment if the

defendant does not show up to the hearing.

Plaintiﬀ can ﬁle as a default judgment; it is

entered administratively by court administration.

Debt documentation requirements are the same

(only apply to debt buyers seeking default).

Debt documentation requirements are the same

(only apply to debt buyers seeking default).

Judgments must be docketed in

District Court to garnish.

Judgments are enforceable.

The fees associated with ﬁling and responding to a case in conciliation court are lower than those in district court,

and debt defendants in conciliation court are signiﬁcantly more likely to engage in their cases. While some of this

disparity in defendant participation may be attributed to district court settlements prior to judgment due to hip

pocket ﬁling, it is unlikely that this practice accounts for the entirety of the diﬀerences in defendant participation.

Table 1

If the amount in controversy for a debt

case is $4,000 or less—something that

is true for the majority of debt cases ﬁled

in Minnesota—the state allows plaintiﬀs to

select the venue for their complaint: either

conciliation court or district court. Plaintiﬀs

can ﬁle lower-dollar cases in district court

even if the amount in controversy makes

the case eligible for ﬁling in conciliation

court. This can create two very diﬀerent

experiences, and often diﬀerent outcomes,

for consumers who owe similar amounts.

Typically, the unique features of district court

cases make them more complex and costly

for self-represented consumers to navigate.

Minnesota’s

Two-Venue

System for

Civil Matters

Diﬀerences between

conciliation court

and district court

Background

MINNESOTA CONSUMER DEBT LITIGATION |

hearing

before judge

default

judgment

trial judgment

for plaintiﬀ

plaintiﬀ may begin

garnishment process

defendant

shows up

defendant

does not show

creditor / collector

can ﬁle claim for

default judgment

MINNESOTA DISTRICT COURT

defendant

does answer

defendant

does not answer

creditor / collector

serves defendant

POCKET FILING

within

days

within

year

dismissed

with/without prejudice

(court-ordered)

Figure 1:

District

Court

A lawsuit to collect on a

consumer debt in district

court follows the process

illustrated here.

Background

MINNESOTA CONSUMER DEBT LITIGATION |

creditor / collector

ﬁles claim with court

hearing

default

judgment

trial judgment

for plaintiﬀ

plaintiﬀ can transcribe

judgment to district court

plaintiﬀ may begin

garnishment process

dismissed

with/without prejudice

(court-ordered)

defendant

shows up

defendant

does not show

MINNESOTA CONCILIATION COURT

Figure 2:

Conciliation

Court

A lawsuit to collect on a

consumer debt in conciliation

court follows the process

illustrated here.

Background

MINNESOTA CONSUMER DEBT LITIGATION |

Plaintiﬀs planning to ﬁle in district court are able to

serve consumers with a summons and complaint

before ﬁling it with the court; they have up to

a year to ﬁle (and can also choose not to ﬁle).

Once consumers are served with a summons

and complaint, they have 21 days to respond to

the plaintiﬀ. Consumers who don’t respond within

this window risk a default judgment—an automatic

decision in favor of the plaintiﬀ when a consumer

doesn’t adequately respond to or participate in the

case against them. During this period, however, there

is no court-issued case number or requirement that

the plaintiﬀ provide proof to the consumer that the

debt is valid. The courts do provide an answer form

(CIV302), but the Committee found that it is almost

never used by consumers being sued for debts. No

notice or oﬃcial documents from the court are sent

to the consumer until after the judgment is entered,

at which point the court sends a notice of entry of

judgment.

This practice does not exist in conciliation court,

where plaintiﬀs must begin the litigation process by

ﬁling their complaint with the court; consumers are

then served with a summons with a hearing date

and time.

Service and ﬁling

requirements make

Minnesota an outlier

Background

District court allows “hip pocket ﬁling,” which

gives plaintiﬀs the leeway to serve consumers

notice of a debt lawsuit before ﬁling that suit in

court. Minnesota is one of just a handful of states

(including Colorado, North Dakota, South Dakota,

and Utah) that employs this practice.

Figure 3: Stages of debt lawsuit with hip pocket ﬁling

Map 1: Only 5 states employ hip pocket ﬁling

Colorado, Minnesota, North Dakota, South Dakota,

and Utah permit some civil actions to commence at

service rather than ﬁling.

Consumers who don’t respond within

21 days risk a default judgment—an

automatic decision in favor of the plaintiﬀ

when a consumer doesn’t adequately

respond to or participate in the case

against them� During this period, however,

there is no court-issued case number or

requirement that the plaintiﬀ provide proof

to the consumer that the debt is valid�

Notice and

Service

Suits Filed

with Court

Notice and

Service

Some Suits

Settled

Remaining

Suits Filed

with Court

Response

Resolution

Post-

Judgment

Post-

Judgment

Typical

state

n court involvement n out of court

Minnesota

hip pocket

MINNESOTA CONSUMER DEBT LITIGATION |

In conciliation court, consumers are required to

participate in their hearings but are not required

to ﬁle an answer to the case unless entering

a counterclaim. In district court, not only are

consumers required to ﬁle an answer, but they

must pay a $285 ﬁling fee (plus additional fees

depending on the judicial district) to do so. Few

state civil courts in the U.S. charge consumers to

answer, and no other state in the region has such a

high answer fee (see Fig. 14, p. 27). The consumer

can also respond by sending something in writing

directly to the plaintiﬀ, but knowing how to compose

these informal responses can be confusing for self-

represented litigants, and they often don't know how

or where to send them, so the court generally has

no record of them.

Even compared to the handful of other states with

hip pocket ﬁling practices, Minnesota district courts

allow plaintiﬀs one of the longest windows of time

between service and ﬁling in the country, making it

an outlier among outliers. Most other states with hip

pocket ﬁling, including Colorado, Utah, and North

Dakota, have hip pocket ﬁling windows between 10

and 21 days, commensurate with the amount of time

defendants have to respond. Minnesota’s window

of 365 days for plaintiﬀs to ﬁle is far longer than the

window for consumers to respond.

Background

The lengthy ﬁling time oﬀers beneﬁts and

drawbacks. A beneﬁt of the longer ﬁling time is

that it can allow plaintiﬀs and consumers time to

settle the matter before it reaches the court, without

incurring additional costs or creating a record. The

uneven timing requirements also have drawbacks:

because mandatory disclosures (including

documents in support of the plaintiﬀ’s claim) are not

triggered unless the consumer responds, and debt

buyers are only required to provide documentation

14 days before applying for a default judgment,

consumers have less time to respond and attempt to

verify the claim than plaintiﬀs have to ﬁle.

According

to stakeholder interviews, service paperwork may be

discounted or viewed as a “scam” if there is nothing

about the case yet available through the courts. This

may impact a consumer’s likelihood of responding

to a case in time, or at all. Because the court is

not involved in the pre-ﬁling process, there is no

data to indicate the number of cases settled out of

court. Altogether, these policies smooth the way for

plaintiﬀs to obtain default judgments.

Table 2: States with hip pocket ﬁling oﬀer shorter windows

for plaintiﬀ ﬁling, defendant response than Minnesota

Comparison of “serve ﬁrst" procedures in states where a civil

lawsuit may be commenced at service rather than ﬁling.

STATE

Time between

service and filing

Time for defendant

to respond

SOUTH DAKOTA

“Forthwith upon service”

30 days

UTAH 10 days 21 days

COLORADO 14 days 21 days

NORTH DAKOTA 20 days 21 days

MINNESOTA 365 days 21 days

Source: N.D.R. Civ. P. Rule 3, Rule 5; S.D. Codiﬁed Laws § 15-2-30; CRCP 3(a); U.R.C.P. Rule 3, Rule 4; Minn. R. C. P. 3

According to stakeholder interviews, service

paperwork may be discounted or viewed as

a “scam” if there is nothing about the case

yet available through the courts�

MINNESOTA CONSUMER DEBT LITIGATION |

Background

Courts Are

Hands-Oﬀ in

Post-Judgment

Matters

Minnesota courts have more limited involvement in

garnishment processes and other post-judgment

activities compared to other states. Plaintiﬀs and

their attorneys usually directly communicate with

garnishees and self-represented defendants about

garnishment matters with little intervention from the

courts.

In most states, when plaintiﬀs want to collect

a judgment, the plaintiﬀ must ﬁle for a writ of

garnishment (or execution) with the court, after

which the court issues a garnishment summons

that is served on both the consumer and their bank

or employer. The bank or employer then has to

answer to the court whether they have any of the

judgment debtor’s assets, so the court has a record

of how many garnishments were attempted and

whether there were assets subject to garnishment.

Additionally, in most states the consumer lets the

court know if they have assets that are protected

from garnishment or levy by ﬁling an exemption form

with the court, meaning the court has some record

of and insight into how its judgments are enforced.

But Minnesota is not like most states. In Minnesota,

the plaintiﬀ attorney, instead of the court, prepares

the garnishment summons that goes to the bank

or employer, as well as the notice that goes to the

consumer. The bank or employer answers directly

to the plaintiﬀ to let them know whether there are

any assets subject to garnishment or levy. And if

the consumer wants to claim exemptions, instead

of ﬁling a claim of exemptions with the court, the

consumer must communicate directly with the

plaintiﬀ’s attorney. The court only gets involved in

exemptions if one of the parties objects and asks for

an exemption hearing, which may be burdensome

and/or confusing for self-represented consumers.

As a result of this hands-oﬀ process, the court

has incomplete knowledge of how plaintiﬀs are

using the power of the court to satisfy debts. Nor

do the courts have the opportunity for quality

control regarding whether consumers are able to

adequately assert their right to have exempt assets

protected from garnishment or levy. Lack of court

involvement also means that consumers have a

slower path to resolution when protected funds are

garnished.

In Minnesota, the judgment creditor doesn’t have to

apply for a writ until after the garnishment summons

has been served, the employer or bank has withheld

or frozen the funds, the exemption period has

passed, and the funds are released to them.

MINNESOTA CONSUMER DEBT LITIGATION |

Background

The Minnesota Attorney General’s Oﬃce

has collected stories of Minnesotans who

have experienced issues with the level of

the court’s involvement in post-judgment

activities� In 2016, Minnesotan “Jess Doe”

had a judgment entered against her for an

old debt; in 2023, she noticed a pending

transaction of over $13,000 in her bank

account by the collector� The next day, the

funds were released by Jess’s bank and

taken by the collector� Jess said that the

collector never sent a garnishment summons

or the two exemption forms that they are

required to send� Jess is on MinnesotaCare

and likely would have been eligible for the

exemption� She had to print the forms herself

and send them to the collector�

Although Minnesota has solid laws on the books

related to debt litigation, such as documentation

requirements for debt buyers and exemption policies

for consumers receiving public assistance, the

state’s challenge is making sure that the intentions

of those policies are being realized.

Methodology

The report used a mixed methods

approach to understand the landscape

of debt collection lawsuits in Minnesota.

This included conducting a policy

landscape analysis, process maps of

how a case moves through district and

conciliation court, stakeholder interviews,

and quantitative analysis of court data

from multiple sources (the Minnesota

Judicial Branch’s Civil Judgments Extract,

anonymized case intake data from

Minnesota-based legal aid organizations,

data from the 2015-2019 American

Community Survey, the Consumer Financial

Protection Bureau’s Consumer Complaint

Database, the 2017 Financial Well-Being

Survey, and a random sample of 1,000

cases ﬁled between 2018 and 2021).

Unless otherwise noted, the ﬁndings in

this report generally concern cases ﬁled

over the ten-year period between 2011-

2021. Also of note, because the courts

do not collect demographic information,

the researchers imputed demographic

information based on defendant names and

addresses.

The leadership team sought to interview

consumers with lived experience of civil

debt litigation in Minnesota. Interviewees

were identiﬁed through referrals from

LawHelpMN, the court’s Self-Help Center,

and Attorney General’s consumer hotline.

Several consumers scheduled interviews,

but ultimately only two consumers

participated. Additionally, the Attorney

General’s oﬃce provided three anonymized

accounts of consumers who had contacted

the consumer hotline for assistance with an

issue related to consumer debt litigation.

To conduct the analysis, the research

team consulted with the leadership team

to identify relevant research questions and

understand ﬁndings. For more information,

see the full methodological appendix.

MINNESOTA CONSUMER DEBT LITIGATION |

1. The majority of

Minnesota civil cases

are debt cases�

2. Debt collection lawsuits

are spread across the

state’s 10 judicial districts�

3. Most debt cases involve

$4,000 or less.

4. Debt buyers represent a

growing share of plaintiﬀs�

5. Minnesota has a

disproportionately high

debt case ﬁling rate�

6. Black and Latino

Minnesotans at all income

levels are more likely than

White residents to have debt

suits ﬁled against them�

7. Defendants rarely have legal

representation; plaintiﬀs

almost always do�

The characteristics of

plaintiﬀs, debts, and consumers

Research Findings

MINNESOTA CONSUMER DEBT LITIGATION |

Research Findings The characteristics of plaintiffs, debts, and consumers

The majority of

Minnesota civil cases

are debt cases

Consumer debt cases are ﬂooding Minnesota

civil courts. In 2019, debt collection lawsuits

were the most common civil case type in

Minnesota, making up 51% of the civil docket.

Minnesota courts see four times as many debt

cases as they do evictions, the next most

common case type.

Figure 4: Consumer debt lawsuits

dominate the civil docket

Courts hear four times as many debt cases as

the next most-common case type.

Between 2011 and 2021, 664,000 debt

cases were ﬁled in the two Minnesota venues

that hear such claims: district court and

conciliation court. Claims were distributed

almost evenly between the two courts during

that time span, with roughly 300,000 cases

ﬁled in district court and 364,000 cases ﬁled

in conciliation court.

Debt is everywhere

Consumer debt exists throughout Minnesota, from

Southern Minnesota to the Twin Cities, to the Iron

Range, and everywhere in between. Debt collection

lawsuits are ﬁled all across the state and are not

conﬁned to urban or rural areas.

Case ﬁlings are evenly spread across the state’s

10 judicial districts, for the most part. Residents in

judicial districts that include rural areas—such as the

Iron Range, which is included in the 6th District—

have a slightly higher rate of ﬁlings against them.

Urban residents, such as those in Minneapolis,

which falls under the 4th District, have a slightly

lower rate of ﬁlings against them.

Figure 5: Debt cases are spread across

all Minnesota judicial districts

Litigation is slightly more common in some areas,

but Minnesotans are aﬀected statewide.

51%

consumer

debt

36%

other civil

12%

eviction

Number and share of civil cases ﬁled by case type. Consumer debt cases

deﬁned as cases ﬁled in conciliation or district court (Default, Consumer

Credit, Confession of Judgment,) between a business (plaintiﬀ) and

consumer (defendant). Transcript Judgments are removed from the total

count. Numbers do not add up to 100% due to rounding.

Sources: Minnesota Judicial Branch Civil Case Extract and District Court

Case Dashboard, 2019.

Judicial District

0 0.5 1.0 1.5 2.0

1.6

1.7

1.4

1.3

1.8

1.5

1.3

1.7

2.3

Debt collection ﬁling rate

Average annual debt collection ﬁling rate in Minnesota conciliation & district courts,

2017-2019. Filing rate calculated as number of cases ﬁled per 100 residents.

Source: Minnesota Judicial Branch Civil Case Extract, 2017-2019;

American Community Survey

MINNESOTA CONSUMER DEBT LITIGATION |

Minnesota has the lowest debt rate,

but it also has fewer adults with any

debts in collections�

In fact, there are more debt cases

ﬁled in Minnesota as a share of

the population with any debt in

collections than other Great Lakes

states and Utah�

In other words, Minnesota has

fewer debtors but creditors and

debt buyers are more likely to

ﬁle lawsuits than in other states�

In terms of sheer numbers, Minnesota has fewer debt ﬁlings

than states such as Michigan, Wisconsin, Indiana, Utah,

and Texas. In 2019, there were 71,787 debt cases ﬁled

in Minnesota, a rate of about 1.68 cases per 100 adults.

Minnesota also has a lower percentage of residents in debt

than in those states—just 13% of residents have a debt in

collections.

That low percentage of residents in debt would suggest that

creditors wouldn’t need to ﬁle lawsuits to recoup debt quite

as often as they do in other states. But, in fact, the litigation

rate for debt in the state is relatively high—nearly 1 in 8

people with debt in collections end up being sued—which

suggests creditors are actually more likely to ﬁle lawsuits in

Minnesota than in other states.

MINNESOTA MICHIGAN WISCONSIN INDIANA UTAH TEXAS

Debt Cases Filed (2019)

71,787

208,051 81,879 104,757 59,519 398,764

Debt Cases Per 100 Adults

1.68

2�64 1�8 2�03 2�6 1�86

% Residents with

Any Debt in Collections

13%

26% 20% 28% 19% 37%

Litigation rate:

Debt Cases per 100 Adults

with Any Debt in Collections

12.9

10�2 9�0 7�2 13�7 5

Figure 6: Minnesotans in debt are more likely to end up in court

Despite having fewer debt cases than in other states, consumers in Minnesota are sued more.

Source: January Advisors, Urban Institute

Minnesota has a high litigation rate

Minnesota has a relatively small number of residents in debt, but a high debt litigation rate.

Research Findings The characteristics of plaintiffs, debts, and consumers

MINNESOTA CONSUMER DEBT LITIGATION |

Amounts in controversy

are too high for

consumers to pay,

but too low to justify

hiring an attorney

Most debt cases involve relatively

low amounts of money.

As is the case in other states, the majority of debt

collection lawsuits in Minnesota do not involve

large sums in the tens of thousands of dollars. The

median amount in controversy at the time of ﬁling is

$1,211 in conciliation court and $3,411 in district

court. Just a quarter of consumers are sued for

$4,000 or more.

Although these amounts may seem low, plaintiﬀs

spend a considerable amount of time, money,

and eﬀort trying to recoup these debts. And for

individual consumers who have had diﬃculty

paying back the debt they’ve accrued, the amounts

are signiﬁcant. Litigating large numbers of these

small-dollar matters, which ostensibly could be

resolved outside of formal legal action, also places a

signiﬁcant strain on court dockets.

The majority of plaintiﬀs

are debt buyers

Debt lawsuits in the state are largely

driven by a small number of high-volume

plaintiﬀs with expertise in ﬁlings such

claims and access to and mastery of

court tools, such as bulk ﬁling, that allow

them to pursue and win large numbers

of cases�

In fact, just 10 ﬁrms were

responsible for ﬁling two-thirds of debt

suits in the state in 2020 and 2021�

The majority of these cases involve credit card debt:

in district court, 95% of all lawsuits brought by debt

plaintiﬀs were over credit card debt, according to a

review of case documents among a random sample

of debt lawsuits ﬁled between 2018 and 2021.

Three-quarters of debt cases ﬁled in conciliation

court dealt with credit card debt.

The majority of plaintiﬀs are debt buyers--third-

party companies that purchase debts from original

creditors, often for pennies on the dollar, with the

intention of collecting the full amount owed.

Of the

top plaintiﬀs in Minnesota, debt buyers ﬁled half of

all lawsuits from 2017 to 2019.

During that same time period, credit card companies

and banks ﬁled 21% of lawsuits and medical

providers ﬁled 12% of lawsuits. The remaining 18%

of debt cases were ﬁled by smaller ﬁlers, such as

payday and other lenders.

Research Findings The characteristics of plaintiffs, debts, and consumers

MINNESOTA CONSUMER DEBT LITIGATION |

Medical debt in Minnesota

In recent years, medical debt has

emerged as an area of concern for

policymakers� Medical debt and

other forms of debt, such as credit

card debt, are often intertwined and

interconnected� For example, patients

may resort to charging medical bills to

their credit cards, resulting in unpaid

credit card balances that actually stem

from medical expenses� Additionally,

some individuals may prioritize

paying their medical bills directly but

rely on credit cards to cover other

essential expenses like groceries

and transportation costs� Therefore,

while it is essential to recognize the

signiﬁcance of medical debt as a

distinct issue, it is equally important to

acknowledge its interconnectedness

with credit card debt and the broader

ﬁnancial challenges individuals face�

By adopting a holistic perspective,

policymakers can develop

Original Creditor Debt Buyer

Goods and Services 95%

Payday Loan/Fees 94%

Housing (Rent and HOA fees) 90%

Medical Services 72%

Auto Loan 69%

Utilities 46%

Credit Card/Bank Loan 30%

Other/Unknown 24%

Insurance-related payments 100%

Bail Bond 100%

Figure 7: Debt buyers and original creditors bring diﬀerent types of debt to court

comprehensive strategies that address

both medical debt and the related

ﬁnancial burdens faced by individuals�

The type of debt at issue in debt

collection cases in Minnesota is not

tracked by the courts� To identify

medical debt cases, researchers

reviewed court documents from a

subsample of cases and classiﬁed

debt as medical debt based on the

original creditor� Medical debt includes

debt accrued from hospitals, dentists,

outpatient clinics, and other medical

providers�

In Minnesota, medical debt accounts

for 17% of debt collection cases, with

a higher prevalence of such cases

in conciliation court (25%) compared

to district court (7%)� This amounts

to 0�28 cases per 100 adults in

Minnesota�

Whereas most debt litigation in

Minnesota is brought by debt buyers,

the majority of medical debt cases

(75%) are ﬁled by original creditors;

for cases involving other types of

debt, such as credit card debt and

utilities, debt buyers predominate�

The prevalence of original creditors

ﬁling medical debt cases highlights

the direct involvement of healthcare

providers and medical institutions

in pursuing legal action to collect

outstanding medical debts,

underscoring the unique dynamics

and characteristics of medical debt

within the debt collection landscape�

Source: Hand sample (N=1,001 cases) analysis of Minnesota consumer debt cases, 2018-2021.

Share of cases ﬁled by original creditors and debt buyers by type of debt, 2019-2021.

10%

28%

31%

54%

70%

76%

MINNESOTA CONSUMER DEBT LITIGATION |

Some of the top ﬁlers of medical

debt in the state are medical provid-

ers. Fairview Health Services is the

top ﬁler Minnesota, accounting for

20% of all medical debt collection

ﬁlings. Other top medical providers

ﬁling debt collection cases include

Center for Diagnostic Imaging

(10%), Healtheast Care System

(10%), and Mayo Health System

(4.6%). Debt buyers are also ﬁling

medical debt cases in Minnesota,

including Accounts Receivable

Services (12%) and Accounts

Management Inc. (5%).

The amount of money involved in

medical debt cases taken to court

in Minnesota tends to be relatively

modest. The median amount in

controversy is $1,500, with the

interquartile range spanning from

$700 to $2,600. This is a lower

amount than in cases involving

credit card debt, auto loans, and

bail bonds. These ﬁgures suggest

that the medical debts subject to

legal action are more frequently

associated with patients who

struggle to meet their deductibles

rather than cases involving

astronomical hospital bills.

PLAINTIFF

Fairview Health Service 20%

Accounts Receivable

Services LLC

11.53%

Center For Diagnostic

Imaging

10%

Healtheast Care System 10%

Accounts Management Inc

5.38%

Mayo Clinic Health System 4.61%

Bradstreet Associates LLC

3.84%

Range Credit Bureau Inc

3.07%

Credit Service Intl Corp 1.53%

Winona Health 1.53%

Woodwinds Hospital 1.53%

Still, the total amount of money owed

in judgments for medical debts is

quite large. In 2019, an estimated $25

million in judgments was issued for

cases involving medical debt.

Looking

at case outcomes, most defendants

lose or settle their cases. But there are

important diﬀerences between cases in

conciliation and district courts. Medical

debt cases in conciliation court have

below-average default rates (40% vs

52% for all case types in conciliation)

and higher rates of settlement and

dismissals. In district court, medical

debts have a higher rate of default at

88%, which is similar to the average for

all case types in district court. These

diﬀerences may be partly due to the

amount of money owed in these cases:

the median medical debt in conciliation

court is $1,200 compared with $3,100

in district court.

Among conciliation court cases,

an estimated 70% of medical debt

cases that result in a judgment

are transcribed to district court,

according to an analysis of event

data from a subsample of cases.

That is slightly higher than the

average among all judgments in

conciliation court of 64%.

Table 3: Four plaintiﬀs account

for over 50% of medical debt

ﬁlings in Minnesota

Top ﬁlers 2018-2021, % of medical debt,

categorized by type of debt.

Figure 8: The median amount in controversy varies by type of debt

Median amount in controversy for district court cases by debt type, 2018-2021. Excludes transcript judgments.

2500

5000

7500

Auto Loan (1.7%)

Bail Bond (1.8%)

Credit Card/Bank Loan (64.1%)

Goods and Services (5.5%)

Housing (Rent and HOA fees) (2.6%)

Insurance-related payments (1.7%)

Medical Services (16.6%)

Other/Unknown (2.2%)

Payday Loan/Fees (2.3%)

Utilities (1.7%)

Source: random sample review of documents

Source: Hand sample (N=1,001 cases) analysis of Minnesota consumer debt cases, 2018-2021.

$7,688

$4,130

$2,031

$2,400

$1,785

$5,385

$1,507

$1,515

$430

$645

MINNESOTA CONSUMER DEBT LITIGATION |

There are racial

disparities in who

is sued for debt

Black and Latino Minnesotans are

sued more often than White Minnesotans.

When creditors turn to the courts for help

collecting a debt, some Minnesotans are

disproportionately impacted.

Overall, the rate of debt claims ﬁled against Black

and Latino Minnesotans is more than twice that of

Non-Hispanic White Minnesotans.

These racial gaps also exist in high-income

neighborhoods. While White Minnesotans in higher-

income neighborhoods tend to have lower rates

of debt claims ﬁled against them than their White

counterparts in lower-income neighborhoods, the

same is not true of Black and Latino residents. In

both lower-income and high-income neighborhoods,

Black and Latino Minnesotans have a much

higher rate of debt claims ﬁled against them than

their White neighbors. This pattern holds even in

Hennepin County, home to Minnesota’s largest

Black and Latino populations.

Figure 9:

Minnesotans of Color

of all income levels

face debt suits at

higher rates

Black and Latino

consumers are sued

two to three times as

often as Non-Hispanic

White consumers.

Number of debt lawsuits ﬁled

per 100 adults by race-ethnicity of

defendant and neighborhood median

household income, 2017-2019.

Defendant’s race-ethnicity estimated

using ﬁrst defendant’s surname and

race-ethnicity of census tract of

residence.

Figure 10: Minnesotans living in lower-income

areas are sued for debt in higher proportions

Debt litigation is brought more frequently against those

living in neighborhoods with a median household

income of $50,000 or less than those above $50,000.

Number of debt lawsuits ﬁled per 100 adults by

neighborhood median household income, 2017-2019.

Only among non-Hispanic White residents are debt

caseloads highest among individuals in lower-income

neighborhoods, where the median household income

is less than $50,000, and lower among those in

higher-income neighborhoods, where the median

household income exceeds $75,000 a year.

This aligns with national data on borrowing.

Although higher-income households tend to borrow

more money through their credit cards than other

households, the amount of credit card debt that

lower-income households take on makes up a larger

percentage of their monthly income and liquid assets.

n Asian/AAPI n Black/African American n Hispanic/Latino n Non-Hispanic White n Other race-ethnicity

$50,000 or less $50,000 to $75,000 $75,000 or more

1.81.8

1.61.6

1.21.2

Debt ﬁling rate (per 100 adults)

Research Findings The characteristics of plaintiffs, debts, and consumers

Source: Minnesota Judicial Branch Civil Case Extract, 2017-2019; American Community Survey

1.6

1.7

1.4

3.0

3.2

3.0

2.7

3.0

2.7

1.5

1.4

1.1

1.7

1.8

1.4

1.8

1.6

1.2

MINNESOTA CONSUMER DEBT LITIGATION |

Legal representation

is uneven

Consumers rarely have legal representation;

plaintiﬀs almost always do.

Consumers have legal representation in only 3% of

district court cases and 0.2% of conciliation cases.

Plaintiﬀs, on the other hand, have representation in

98% of debt cases in district court; in conciliation

court, 69% of plaintiﬀs have an attorney.

Debt plaintiﬀs rely heavily on ﬁve specialized law

ﬁrms. Those ﬁve ﬁrms represented plaintiﬀs in nearly

60% of cases ﬁled in 2018-2021.

There is a huge divide between plaintiﬀs and

defendants when it comes to their ability to navigate

civil court processes because so many cases are

litigated on the plaintiﬀ side by law ﬁrms who are

skilled in these cases, and many of these ﬁrms work

on behalf of a handful of experienced companies

whose business is buying and collecting on unpaid

debts.

Conversely, many consumers involved in debt

litigation may fall into the “legal aid gap,” meaning

they do not have enough money to hire a private

attorney, but they earn too much to qualify for legal

aid services.

The income threshold for most legal aid eligibility

in Minnesota is 125% of the federal poverty line.

For a family of four, that’s less than $37,500 a

year. Statewide in 2019, only 8.4% of families in

Minnesota live below this threshold. Using census

tract information, the research team estimated

82% of all debt collection cases ﬁled in Minnesota

from 2017 to 2019 were against consumers with

household incomes ineligible for legal aid.

Nearly two-thirds of cases were ﬁled in

neighborhoods where fewer than 1 in 10 families

qualify for legal aid. The disconnect between people

needing free and aﬀordable legal help and actually

being able to qualify for it, coupled with the fact

that Minnesota legal aid doesn’t have the resources

and attorneys to meet the demand for assistance,

meant legal aid programs were only able to serve

3,000 debt-related cases between 2019 to 2021.

Absent programs or legal resources for mid- or

moderate-income Minnesotans, a signiﬁcant number

of defendants in consumer-facing debt lawsuits are

left to navigate the system on their own.

Figure 11: Consumers in debt span the income spectrum

More than half of suits are ﬁled against Minnesotans earning less than $75,000 for a family of 3

(approximately 300% of the federal poverty line), but litigation aﬀects all income groups.

n <125% FPL n 125%-199% FPL n 200%-299% FPL n 300%+ FPL

Research Findings The characteristics of plaintiffs, debts, and consumers

18�1% 14�2% 12�1% 55�6%

Estimate share

of debt collection

lawsuits ﬁled

against adults

living above and

below the federal

poverty line,

2017-2019.

Source: Minnesota Judicial Branch Civil Case Extract, 2017-2019 American Community Survey

00 01 02 03 04 05 06 07 08 0100 100

MINNESOTA CONSUMER DEBT LITIGATION |

Research Findings

How cases are processed in

district and conciliation court

1. Debt cases in Minnesota

can be handled in one of

two venues, district court or

conciliation court, which have

very diﬀerent processes and

requirements�

2. For cases involving $4,000

or less, plaintiﬀs can choose

the venue, leading to diﬀerent

outcomes for consumers with

otherwise identical cases�

3. One in 10 district court

debt cases is ﬁled eight

months after service, leading

to confusion when consumers

seek information about the

case from the courts�

4. The answer process in

district court is costly, unclear,

and inconsistent�

5. Debt litigation in district

court often ends in default

judgment�

6. Most plaintiﬀs submit at

least some of the required

documentation materials, but

many who don't still receive

default judgments in their favor�

MINNESOTA CONSUMER DEBT LITIGATION |

Debt cases in Minnesota

are handled in one

of two venues

Consumer debt collection cases in Minnesota

are ﬁled in one of two venues: district court or

conciliation court. Between 2017 and 2019,

approximately 57% of all debt collection lawsuits

were initiated in conciliation court; the remaining

43% were ﬁled in district court.

Conciliation Court: 364,198

Transcript Judgment: 184,748

District Court: 485,401

Conciliation Appeal: 1,106

District Court Summons: 299,547

Defendant Responds: 66,238

Confession of Judgment: 11,986

Consumer Credit Contract: 54,252

No Response: 233,309

Default Judgment: 233,309

Settled/Dismissed/Not Transcribed: 178,344

District court provides plaintiﬀs with the opportunity

to seek judgments that enable them to collect

money from defendants through various means,

such as wage garnishment or seizing funds from

bank accounts. Conciliation court imposes a limit of

$4,000 on the maximum amount of money at stake

in a lawsuit. However, if a plaintiﬀ in conciliation

court intends to use the garnishment process

to enforce a judgment, they can transcribe the

judgment into district court and then do so.

Of the cases ﬁled in conciliation court between

2018 and 2021 that resulted in a judgment, more

than 60% were transcribed to district court for

further legal proceedings and enforcement actions.

Figure 12: Volume of debt cases ﬂowing through Minnesota’s civil courts

Conciliation and district courts both see a substantial volume of debt cases every year.

Research Findings How cases are processed in district and conciliation court

Source: January Advisors analysis of Minnesota Civil Judgment Extract

Transcript Judgmentsare not new

cases, but conciliation cases ﬁled in

district court so that the judgment

can be enforced, e.g., through

garnishment.51%of conciliation court

cases are transcribed to district court.

Before district court

cases are ﬁled,

defendants have 21 days

to respond to a properly

served summons. If they

do not respond, plaintiﬀs

can ﬁle the case as a

"Default Judgment."

How many outstanding

cases were never ﬁled is

unknown.

MINNESOTA CONSUMER DEBT LITIGATION |

For cases involving

$4,000 or less, plaintiﬀs

choose the venue

Conciliation courts in Minnesota were designed

for the express purpose of creating a venue

“where people can have their cases heard without

complicated legal procedures.”

Sometimes

referred to as the “people’s court,” conciliation court

proceedings were designed to be easier to navigate

by non-attorneys.

Minnesota court rules allow plaintiﬀs to ﬁle

consumer debt claims involving less than $4,000

in either conciliation court or district court. Venue

choice varies from plaintiﬀ to plaintiﬀ. Some plaintiﬀs

prefer to ﬁle all of their cases in district court, some

ﬁle only in conciliation court, and others split cases

across venues.

Because conciliation court cases can be

transcribed to district court post-judgment,

the choice of venue doesn’t seem to make a

huge diﬀerence for plaintiﬀs, but does aﬀect

consumers� One of the biggest impacts is

related to cost: when plaintiﬀs ﬁle cases

involving small amounts in district court, it’s

more costly for consumers, due to higher

ﬁling fees and other costs that are ultimately

added to the judgment�

The diﬀerence between the judgment amount

and the original claim amount is greater in district

court ($360 in district court, compared to $80 in

conciliation court). District court cases involve

higher ﬁling fees and court costs than conciliation

court cases.

Nearly six in 10 debt cases ﬁled in district court

involve less than $4,000, and around half of the

cases in district court are for amounts under

$3,000. All of these cases are eligible to be ﬁled in

conciliation court.

Research Findings How cases are processed in district and conciliation court

MINNESOTA CONSUMER DEBT LITIGATION |

Figure 13: One in 10 district court cases are ﬁled more than eight months after service

Most cases are ﬁled within three months of service, but some

plaintiﬀs take advantage of Minnesota’s long window to ﬁle.

Distribution of district court cases (not including transcript judgments) by number of days between service and ﬁlings, 2018-2021.

One in 10 district court

debt cases ﬁled more

than eight months after

the defendant is served

Most plaintiﬀs who ﬁled a case in district court

did so within one to three months of serving a

defendant, but some took advantage of Minnesota’s

year-long grace period to ﬁle. One in 10 district

court cases are ﬁled more than eight months after

the defendant is served.

Although fewer than 10% of cases are ﬁled eight

months or more after service, that number still

reﬂects thousands of real Minnesotans facing the

uncertainty of debt litigation hanging over their

heads for months on end.

The yearlong grace period oﬀers consumers and

debt plaintiﬀs a window of opportunity to settle a

case without ﬁling.

It is impossible to know the number of cases that

are settled after the defendant has been served but

before the case is ﬁled, since this process takes

place entirely outside of the court process. These

“ghost” cases are never known to the court because

the plaintiﬀ doesn’t have to ﬁle them in court.

Research Findings How cases are processed in district and conciliation court

Source: Random sample (N= 1,001 cases) analysis of Minnesota consumer debt cases, 2018-2021

Number of cases

0 100 200 300

Number of days between service and ﬁling

25th: 44 days 75th: 119 days

<10% of cases ﬁled

8 months after service

Median:

60 days

MINNESOTA CONSUMER DEBT LITIGATION |

The answer process in

district court is costly

and confusing

In district court, consumers are required to ﬁle a

formal answer to a case against them within 21

days, but doing so costs the consumer $285 or

more in “answer fees.” Defendants in conciliation

court, on the other hand, aren’t required to ﬁle a

written answer to either the plaintiﬀ or the court

before scheduling a hearing; if they wish to ﬁle a

counterclaim, the cost is between $65 and $80.

Most neighboring states’ civil courts do not collect

answer fees in civil courts; those that do typically

have much lower fees than Minnesota.

In addition to the high cost associated with the

formal answer process, which may deter consumers

from responding, the answer process itself can

cause confusion, due to the lag time between

service and when a plaintiﬀ ﬁles a case in district

court (because conciliation court does not allow hip

pocket ﬁling, it eliminates the confusing process of

requiring defendants to respond to a case that has

not yet been ﬁled in court).

Information gained through court data shows

that it is rare for a consumer to submit a formal

answer with the court. Stakeholders shared that

it is more common for defendants to submit some

sort of response directly to the plaintiﬀ instead of

ﬁling it with the court, and plaintiﬀ attorneys we

spoke with mentioned they will accept any written

communication—it doesn’t have to be the court

answer form. Lack of information may be partly to

blame, but the courts have taken action to help

consumers better understand the cases against

them. In 2020, the district court summons (CIV802)

was revised, along with the complaint form, to be

more useful to self-represented litigants.

The

updated paperwork provides some information

for consumers who wish to contest a claim, but

summonses do not include details on how to settle

the case, agree to a payment

plan, or protect exempt

assets from garnishment. The

summons does, however, tell

the consumer that “If you

agree with the claims stated in

the Complaint, you don’t need

to respond. A default judgment

can then be entered against

you for what the Plaintiﬀ asked

for in the Complaint.”

Similarly, although the

conciliation court process

is slightly less confusing

and involves fewer steps,

its summonses only provide

information about showing up

for a hearing and submitting

evidence, with no mention of

how to settle a case, agree

to a payment plan, or protect

wages from garnishment.

An examination of a sample of 106 cases ﬁled in

district court since the revised form was adopted

found that none of the plaintiﬀs were using the new

form. Additionally, none of the forms the plaintiﬀs

prepared included plain language instructions and

links to the court’s help topic pages.

Figure 14: Comparison of ﬁling and answer fees

Minnesota's costs to ﬁle make it an outlier among its neighbors.

Research Findings How cases are processed in district and conciliation court

n Filing Fee n Answer Fee

$500

$400

$300

$200

$100

570

484

266

195

150

130

120

100

MichiganWisconsinIllinois Iowa North

Dakota

Indiana South

Dakota

Ohio

Source: Pew analysis of selected civil court costs

Minnesota

MINNESOTA CONSUMER DEBT LITIGATION |

Most debt cases in

Minnesota end in

default judgment

District Court

When a consumer fails to respond, or ﬁle an answer

to, a lawsuit, the matter ends in default judgment:

an automatic decision in favor of the plaintiﬀ when

a defendant doesn’t adequately participate in the

case against them. Eighty-two percent of consumer

debt cases ﬁled in district court end in default,

versus 54% in conciliation court. This rate may be

higher because other states do not allow hip pocket

service, which may indicate more cases being

resolved outside of court.

This district court default rate is higher than in most

states and above national numbers: in 2020, The

Pew Charitable Trusts reported that more than 70%

of debt collection lawsuits (in jurisdictions with

available data) ended in default judgments for the

plaintiﬀ between 2010 and 2019.

Conciliation Court

For the 36,000 Minnesotans who are sued for debt

in conciliation court each year, there are fewer

barriers to participation. Conciliation court has no

answer requirement and when a plaintiﬀ ﬁles a case,

the court automatically schedules a Zoom hearing.

Still, less than half of defendants show up to their

hearing in conciliation court. When they do, they

are often sent to breakout rooms with the creditors’

attorney to negotiate a payment plan, without a third-

party mediator and or any information about their

rights provided by the court. At the moment, there’s

no conciliation court form available for defendants

to deny or dispute the claim ahead of the hearing, or

to guide them through available defenses, such as

a debt being past the statute of limitations or having

been discharged by bankruptcy.

District court cases

add more costs for

consumers

In addition to a higher answer fee, district court

cases have other higher costs for consumers. Cases

that result in a judgment against the defendant

have a median ﬁnal judgment amount that is

approximately $360 higher than the original amount,

compared to $80 higher than the original amount in

conciliation court cases.

Plaintiﬀs in district court also request post-judgment

interest more often than in conciliation court, which

can end up costing defendants $600 or more over

the original judgment amount.

$1,000 original claim

+ $167.00

pre-judgment interest and fees

+ $285.00

ﬁling and service fee

+ $479.16

attorney fees (1/3 claim + interest + fee)

+ $96.56

5% post-judgment interest rate

+ $15.00

garnishment ﬁling fee

$2,042.72

total judgment by end of year

Table 4: How costs add up for a consumer in a

typical debt lawsuit in district court

Minnesotans with debt cases face a host of costs and

fees in addition to the amount in controversy.

Because the typical debt lawsuit goes unanswered by the consumer, the $285 district

court answer fee is not included in this table.

Source: Minnesota Judicial Branch

Research Findings How cases are processed in district and conciliation court

MINNESOTA CONSUMER DEBT LITIGATION |

When defendants in a district court debt case don’t

ﬁle an answer—likely due to confusing processes,

associated costs, or other factors—plaintiﬀs can

ﬁle for a default judgment. Minnesota, alongside

California, Arizona, Texas and North Carolina, was

a leader in requiring certain plaintiﬀs to prove the

legitimacy of their claim and that they are the proper

owner of the debt, even when the defendant does

not participate.

1. Copy of the written contract

2. Proof the defendant owns the debt

3. Last 4 of defendant’s SSN, if known

4. Proof of amount of debt

5. Name of original creditor

6. Breakdown of costs, fees, interest, as applicable

7. Valid and complete chain of title

8. Proof of service

9. Proof of 14 days’ notice of intent to apply for

default judgment.

Debt buyers are only required to ﬁle these

documents when seeking a default judgment, but

they do not have to include this information with the

initial complaint or to serve them on the consumer

with the notice of intent to seek default judgment.

This means consumers can still receive summonses

and complaints from a debt buyer they do not

recognize without any information on the original

creditor; in addition, they do not have access to

documents to validate the legitimacy of the claim,

the age of the debt, or the calculation of the amount,

unless they go through the process to request them.

Debt buyers applying for a default judgment are also

required by the statute to send an additional notice

to the consumer. Even then, there is no requirement

that the documentation proving the plaintiﬀ’s claims

must be included in this notice.

Original creditors, such as credit card companies,

banks, payday lenders, or hospitals, are not required

to ﬁle any documentation proving the validity of

their claim. If the defendant fails to participate, the

creditor will get a default judgment without having to

show additional documentation.

Documentation of debt

Minnesota leads the region in requiring plaintiﬀs to ﬁle documentation, but requirements

only apply to debt buyers, and documents are not served to defendants.

Figure 15: Minnesota has higher plaintiﬀ burden

of proof than other Midwest states

The state leads region in requirements for debt buyers.

Plaintiﬀ's

Burden of Proof:

The darker reds

indicate a relatively

higher burden of proof for plaintiﬀs in

consumer debt lawsuits; Minnesota is a

leader among its neighbors in requiring

debt buyers to fully substantiate their claims

before receiving a default judgment.

Minn. Stat. §548.101, enacted in 2013, requires

debt buyers who are seeking a default judgment to

ﬁle with the court proof of account, proof of amount,

and proof of ownership of the debt.

Before the

court may enter a default judgment, debt buyers

must submit the following documentation to the

court:

Research Findings How cases are processed in district and conciliation court

Source: Based on an analysis of court rules and state statutes that apply to debt

collection lawsuits in state civil courts.

MINNESOTA CONSUMER DEBT LITIGATION |

Although this documentation requirement was

implemented after a 2013 law change, to date, there

has been little data on compliance.

To determine whether debt buyers have

provided proper documentation in accordance

with regulations, researchers spot-checked a

representative sample of ﬁles for two of Minnesota’s

nine requirements. This analysis reviewed a

random sample of publicly available documents

in 1,000 cases ﬁled in district court by debt

buyers between 2018-2021, looking for proof of

ownership and account. The analysis shows that

in an overwhelming majority of cases (79%), debt

buyers produced documents that met requirements.

In 12% of cases, the documents were sealed, and

in 9%, the debt buyer did not produce the required

documentation.

Despite the requirement that these documents be

ﬁled before a default judgment is entered, almost

all cases lacking proper documentation still ended

in a default judgment (88% or 15 of the 17 cases

reviewed).

The data also showed that the large debt buying

companies that ﬁled a high volume of cases each

year with the same few specialized law ﬁrms had

above average rates of documentation compliance.

Smaller debt buyers were much more likely to be

missing documentation.

Estimating documentation compliance

Most debt buyers submitted at least some of the required documentation materials,

but many who didn’t still received default judgments in their favor.

Figure 16: Most debt buyers present

required case documentation

Nearly 80% of debt buyer plaintiﬀs can show

documents proving their ownership and the

validity of the debt they are using the court to

collect, but it falls to the debtor to challenge the

veracity of those proofs.

missing at least

one document

n 12% documents are sealed

n 79% has both documents

Research Findings How cases are processed in district and conciliation court

Compliance status with documentation requirements for debt buyer cases ﬁled in

district court, 2018-2021.

Source: Hand sample (N=1,001 cases) analysis of Minnesota consumer debt cases,

2018-2021.

MINNESOTA CONSUMER DEBT LITIGATION |

Research Findings

What happens after court

1. Minnesota courts have very little oversight of the

garnishment process�

2. Long-term consequences of debt judgments can

follow consumers for years�

3. Debt case outcomes harm defendants but don’t

make plaintiﬀs whole�

MINNESOTA CONSUMER DEBT LITIGATION |

Enforcing a judgment

Minnesota courts have little oversight of the

garnishment process.

Garnishment is one of the few tools available to

plaintiﬀs to collect an outstanding debt. Because

garnishment is one of the most powerful tools the

court oﬀers litigants, in most states courts remain

involved in this post-judgment process, usually

requiring plaintiﬀs to request a “writ of execution,”

which prompts the issuance of a garnishment

summons to the consumer’s employer and/or ﬁnancial

institution to initiate the garnishment process.

In Minnesota, the process works diﬀerently, and most-

ly outside of the court’s oversight. Garnishment sum-

monses are prepared by the plaintiﬀ’s attorney and

can be served to the consumer’s bank and employer

directly, without ﬁling any record of it with the court.

As a result, debt plaintiﬀs in Minnesota can have funds

withheld from a consumer’s paycheck or can have

their bank accounts frozen without the court having

any knowledge of these transactions. If this happens,

the plaintiﬀ can seek a writ of execution from the

courts, incurring a fee that is ultimately added to the

judgment amount, or the consumer can voluntarily

agree to have the funds released to the plaintiﬀ by the

employer or bank.

This is diﬀerent from most states,

where the plaintiﬀ applies for a writ before they begin

the garnishment process and communications with

garnishees, and where the court issues the summons

for the garnishees and notice to the debtors or, in

cases like those in Illinois or Massachusetts, even

holds a garnishment review hearing.

The state’s garnishment exemption process also oper-

ates outside of the court: defendants who believe that

some or all of their wages or other assets are exempt

from garnishment send their exemption forms directly

to the plaintiﬀ, rather than the court. In most states,

the exemptions are ﬁled directly with the court and it

is up to the judge to review and approve them.

Minnesota has policies exempting anyone who re-

ceives means-tested public beneﬁts from having their

wages garnished. However, these exemptions are not

self-executing, meaning the onus is on the consum-

er to assert that their wages are exempt to avoid the

disruption of post-judgment seizure. Without addi-

tional data, it is diﬃcult to ascertain whether and to

what extent consumers are able to beneﬁt from these

protections. Defendants get a notice 10 days before

their wages are withheld and have 10 days to claim

exemptions. After they claim exemptions, they have

to wait six more days for the creditor to object before

they can get their wages back.

Within 6 days of exemption notice

being ﬁled (Creditor Objects!)

by ﬁling a notice of objection with

the court and mailing a notice of

objection and notice of hearing

to bank and debtor.

(Debtor Objects!)

by ﬁling a notice of objection

with the court and mailing a

notice of objection and notice

of hearing to bank and creditor.

Exemption Hearing

Hearing no sooner than

5, but no later than

7 days from ﬁling.

Figure 17: Disputing exemptions

Aside from issuing a writ of execution upon plaintiﬀ’s request, the court will generally not

get involved in the enforcement process unless one of the parties objects.

The creditor has six days

to object to the debtor’s

exemption notice.

The debtor can object if

they believe the creditor

is garnishing assets that

should be exempt.

If there is an objection,

the court will schedule an

exemption hearing.

These are rare.

Research Findings What happens after court

Source: Analysis of Minnesota policies, including Minn. Stat. §571.72

MINNESOTA CONSUMER DEBT LITIGATION |

Minnesota does not have a personal property exemption

protecting funds in a bank account. The only funds

exempt from seizure are federal and state means-tested

beneﬁts. Federal beneﬁts tend to be electronically tagged

so the bank can see that they are exempt assets, but state

beneﬁts like the Minnesota Family Investment Program

(MFIP) are not, making it impossible for banks to discern

that these are public beneﬁts that are exempt. Wages

deposited in a bank account are also exempt from seizure

for 20 days after deposit, though the burden is on the

consumer to show that they can be traced back to their

employment. In the case of bank accounts, consumers

don’t get notice until two days after the funds are frozen,

and then they have 14 days to claim that some of those

assets should be protected, such as public beneﬁts or

wages. Creditors are given six days to object.

What this means for

consumers is that their

entire bank account,

including protected

assets, could be frozen

before they even get

notice, and that they

can stay frozen for a

week, with no access

to any money to cover

basic needs�

Minnesota is one of three

midwest states with no

bank account protections

for consumers

Research Findings What happens after court

Figure 18: Minnesota 1 of 3 Midwest states with no bank account protections for consumers

Other states protect some amount in consumer bank accounts.

Source: National Consumer Law Center, “No Fresh Start 2022”

$5,000

$3,000

$1,000

$550

$450

Bank

Account

Protections

MINNESOTA CONSUMER DEBT LITIGATION |

Consequences of debt

judgments can follow

consumers for years

Failure to understand and adequately participate in

a complex debt lawsuit comes with serious ﬁnancial

consequences, from wage garnishment to bank

levies. Consumers can struggle to pay the judgment

against them and may also have diﬃculty paying

for basic, everyday needs such as housing and

transportation.

Debt case outcomes

don’t make plaintiﬀs

whole

A judgment can wreak havoc on a defendant’s

ﬁnances and, by extension, their life, yet it still

doesn’t guarantee resolution for the plaintiﬀs. In an

analysis of debt collection judgments in Minnesota,

(based on cases ﬁled between 2017 and 2019),

researchers with January Advisors found that only

35% of cases with a judgment were recorded as

satisﬁed (fully paid oﬀ). An additional 7% were just

“partially satisﬁed,” meaning well over half of the

cases during that period remain unsatisﬁed.

Figure 19:

Only 35% of debt judgments between

2017 and 2019 were recorded as satisﬁed

58% of judgments during that period were either

unsatisﬁed or not recorded.

Satisfaction of judgments among district court cases with a judgment, 2017-2019.

58%

None/Unknown

35%

Satisﬁed

Partial

Most (58%) debt collection lawsuits with judgments

have either not been satisﬁed or lack any

information about satisfaction. The underreporting

of satisfaction by plaintiﬀs can have adverse

consequences for consumers attempting to resolve

their debts. Filing satisfaction with the court allows

consumers to demonstrate that they have paid

their debts, ultimately helping them improve their

credit prospects. When consumers have fulﬁlled

a judgment but do not receive credit for it in court

records, the burden of debt persists, exacerbating

the cycle of debt and ﬁnancial hardship.

Research Findings What happens after court

Source: Minnesota Judicial Civil Case Extract, 2017-2019

MINNESOTA CONSUMER DEBT LITIGATION |

Develop specialized procedural rules for debt cases to better

manage consumer debt cases. Requiring plaintiﬀs to ﬁle all

consumer debt collection cases involving amounts under $4,000 in

conciliation court, standardizing documentation requirements, adapting

court documents and forms to address high number of self-represented

litigants, and eliminating “default judgment” as a case type are ways

courts can take a more active role in case management�

Create and improve resources that enable self-represented

litigants to participate in their cases. Improved court forms

for consumers, including plain language defendant answer forms, self-

help materials, and online tools will help court users access information

relevant to their cases and make participation less burdensome for

people without attorneys�

Preserve economic stability so Minnesotans can aﬀord basic

needs while repaying their debts. Ensuring funds suﬃcient to

cover basic needs are protected from garnishment as well as improving

communications and processes around garnishment, and garnishment

exemptions, will ensure that Minnesotans in debt can resolve their issues

without facing ﬁnancial ruin�

Expand services for lower- and moderate-income people who

are struggling with debt. Improving and strengthening legal aid

services and resources and making them available to a wider group of

Minnesotans will allow people in debt to resolve their issues with less

court involvement, saving time and costs for litigants and courts�

Recommendations

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

Recommendation 1:

Develop specialized procedural

rules to better manage

consumer debt cases�

Consumer debt cases in Minnesota are characterized by their high volume

and by the signiﬁcant number of unrepresented litigants involved in suits.

These factors pose a signiﬁcant access to justice challenge for the courts

because they must work to eﬃciently dispose of cases on behalf of those

making a debt claim while ensuring that unrepresented litigants can fully

participate. The Access to Justice Committee recommends that Minnesota

courts consider adding speciﬁc rules of civil procedure for consumer debt

cases (as has been done for housing and family cases) to facilitate the

eﬀective and equitable resolution of these matters.

1.1 Require that all business-to-consumer debt cases with an amount

in controversy less than $4,000 be ﬁled in conciliation court.

1.2 Improve how debt documentation requirements are implemented.

1.2.a Expand debt documentation requirements to all plaintiﬀs.

1.2.b Require documentation of debt to be provided to

defendants at the time of service.

1.2.c Court adopts standardized practice to review

documentation of debt.

1.3 Mandate and enforce the use of a standard summons for debt

collection lawsuits.

1.4 Use “consumer credit” for all consumer credit cases, including

those ﬁled by plaintiﬀs seeking default judgment as a potential

outcome.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations Recommendations

1.1 Require that all business-to-

consumer debt cases with amounts

in controversy of less than $4,000

be ﬁled in conciliation court.

Minnesota consumer debt claims over $4,000

must be ﬁled in district court, but a debt claim

under $4,000 can be ﬁled in either district court or

conciliation court. This means that for a similar claim

a consumer could have vastly diﬀerent processes,

outcomes, and added costs. Conciliation court

was designed to be easier to navigate without

an attorney, and the data show a higher rate of

consumer participation in conciliation court than

district court.

The Access to Justice Committee believes

conciliation court is a more appropriate venue

for debt claims under $4,000. The Committee

recognizes that this is a signiﬁcant undertaking,

likely requiring updated forms, a shift in resources,

and consideration of the impact on judicial weighted

caseloads and other metrics impacted by the high

volume of low-dollar debt cases currently ﬁled in

district court. However, the Committee believes

that using conciliation court as the sole venue

for matters with $4,000 or less in controversy will

promote consistent experiences and outcomes for

plaintiﬀs and consumers.

1.2 Improve how debt documentation

requirements are implemented.

In 2018, the Conference of Chief Justices passed

a resolution acknowledging several challenges

that debt collection cases present for consumers

and courts.

The resolution noted issues such as

consumers not recognizing the plaintiﬀ’s name,

consumers not having enough information to

assess the validity of the plaintiﬀ’s claim, and the

high volume of default judgments leading to post-

judgment consequences such as garnishment,

among others.

For consumers, debt documentation helps verify the

facts of a debt claim and their potential ownership

of a debt. For the courts, debt documentation

can ensure that debts are properly attributed and

ﬁled within the appropriate statute of limitations.

The 2018 resolution calls for the adoption of

rules requiring plaintiﬀs in debt collection cases

to ﬁle documentation demonstrating their legal

entitlements to the amounts they seek to collect

before entry of any default judgment.

1.2.a Expand debt documentation requirements

to all plaintiﬀs and all cases.

Minnesota requires debt buyers who are seeking

a default judgment to provide the consumer notice

of their intent to seek a default judgment, and to

ﬁle with the court documentation showing proof of

account, proof of amount, and proof of ownership

of the debt. When court staﬀ review ﬁlings for

suﬃciency, they must ascertain whether the debt

claim is being brought by an original creditor or an

assigned creditor (i.e., debt buyer).

A majority of the Committee recommends extending

the requirements established in Minn. Stat.

§548.101 to apply to all creditors seeking a default

judgment.

This would parallel the 2023 Uniform

Law Commission model Consumer Debt Default

Judgments Act, which also applies to all creditors,

and which was embraced by representatives of the

collection industry, courts, and consumer advocates

as a way to streamline the management of these

high-volume cases and promote consistency for

consumers and collectors.

Some committee members objected to extending

documentation requirements to all debts, noting that

Minnesota’s existing requirements were designed

to address problematic practices speciﬁcally

associated with the debt buying industry, including

suing the wrong person, suing for debt after the

statute of limitations had passed, and suing for the

wrong amount, in addition to issues arising from a

lack of chain of title.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

1.2.b Require documentation of debt to be

provided to defendants at the time of service.

As it currently stands, plaintiﬀs are only required to

share debt documentation when they are seeking a

default judgment, not with service of the complaint

and summons.

A majority of the committee recommends sharing

debt documentation at the time of service to help

defendants understand the origin of the debt,

decrease the likelihood that defendants will perceive

the summons and complaint as a scam, and ensure

that defendants have a consistent window of time to

review.

There was some objection to this recommendation

based on privacy concerns that may arise where

substitute service is used (i.e., when a person over

the age of 18 living at the consumer’s residence

is served, rather than the consumer being sued,

is used to satisfy service of process). Rather than

disturb the status of substitute service as legally

eﬀective service, the Committee recommends

consideration of options to mitigate the risk of

sensitive information being improperly disclosed:

• Provide documentation in a closed packet

addressed to the consumer, with the

summons and complaint on top

• Provide a cover sheet with suﬃcient

disclosures so that the consumer recognizes

the debt, but no sensitive information past

that threshold; and/or

• Require redaction of documentation prior to

service.

1.2.c Court adopts standardized practice to

review documentation of debt.

Court oﬃcials in both district and conciliation court

shared that the review of documentation is diﬃcult.

There is currently no standard format to submit proof

of the debt, leaving court oﬃcials to review pages

of bank account statements, past due bills, and

chains of assignment for every case. The process

is onerous and our review of case documents found

that even though most debt buyers submitted at

least some of the required documentation materials,

many who didn’t still received default judgments in

their favor.

The Committee recommends that the courts explore

ways to standardize the submission of exhibits,

using a standard civil cover sheet

and labeling of

required exhibits when uploading them on a platform

such as MNDES.

This practice would also facilitate

automated review upon submission.

Additionally, the court may consider continuing to

explore opportunities to centralize or regionalize

work in this area. Having select subject matter

expert staﬀ working in this case type could increase

the quality and number of cases that are reviewed

for documentation. An intercounty approach to debt

documentation veriﬁcation might also be helpful for

rural counties that do not see a high volume of debt

cases.

1.3 Mandate and enforce the use of a

standard summons for this case type.

Variation in documents used to initiate consumer

debt claims means the court cannot ensure that

defendants are getting consistent information about

their rights and options, or that the information is in

plain language and understandable for consumers

without attorneys.

The Committee recommends standardizing

and improving court forms used by plaintiﬀs

in debt collection cases, both in district court

and in conciliation court, and mandating and

enforcing their use to ensure consumers are

receiving consistent information in the same,

easy-to-understand format.

Adding the following

information to the current civil summons (CIV802)

and conciliation court Statement of Claims and

Summons would help consumers understand the

processes and consequences related to their

debt cases: language about the implications of a

judgment, the option to contact the plaintiﬀ and try

to settle, and links to self-help information, legal

aid and mediation services. Mandating the use

of this summons as a requirement for ﬁling would

ensure it is implemented. This can be accomplished

by revising Rule 5.04 in district court to give the

court the power to reject ﬁlings without this form

(Conciliation Court Rule 5.07 already requires the

use of court-created forms).

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

1.4 Use “consumer credit” for all

consumer credit cases, including

those ﬁled by plaintiﬀs seeking default

judgment as a potential outcome.

Currently, “default judgment” in Minnesota can

refer to both a case disposition and a case type.

The use of “default judgment” as a case type is

problematic for several reasons. First, conﬂating

the case type with the outcome promotes a culture

within the courts that the outcome of these court

cases is essentially predetermined, undermining

the court’s interest in fairness for all. To the extent

that a consumer has been notiﬁed that there is a

lawsuit against them and is aware of what “default

judgment” means as an outcome, they may see the

case type and assume that the case is already over

and that engagement at this point would be futile.

Second, using “default judgment” as a case type

creates challenges for research and evaluation of

court dockets. Any number of civil actions that are

not consumer debt cases could conceivably result in

a default judgment; thus, the use of an outcome as

a case type obscures the number of consumer debt

cases brought to court as well as the breakdown

and distribution of other case types across the

state. It also makes it more diﬃcult to measure

defendant participation, because the case type does

not include cases where the consumer answers but

subsequently defaults later in the proceeding (this

type of case is counted in consumer credit cases).

Without this information, it is more diﬃcult for courts

to evaluate the need for, and optimal deployment

of, speciﬁc expertise, training, personnel, and other

resources throughout the judicial system. It is also

more challenging to evaluate compliance with ﬁling

and documentation requirements, by making it seem

like these requirements only attach to cases ﬁled

as “default judgments,” and not to cases where

the consumer answers but subsequently drops

out of the case. Relatedly, the current practice

also implicates the ability to evaluate the impact of

policy and process changes, because it artiﬁcially

separates cases that are substantively identical,

making direct comparisons more diﬃcult.

The Committee recommends that these cases

be ﬁled as “consumer credit” case types, with

an indication that the plaintiﬀ is seeking a default

judgment, to allow courts to better collect and

analyze data related to these matters. These

outcomes in turn can bolster the court’s image and

culture of fairness.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

Recommendation 2:

Expand resources to empower

self-represented litigants to

participate in their cases�

Improving and expanding both court forms and self-help

documents to better guide consumers without attorneys

through the litigation process and make them aware of any

alternatives available to them will help consumers better

advocate for themselves and understand the diﬀerent outcomes

and consequences related to a debt lawsuit. Consumers who

are informed and prepared to engage with their lawsuits can

communicate productively with plaintiﬀs, beneﬁting all sides.

2.1 Improve the standard court answer form to include plain

language descriptions of the common defenses to a debt

lawsuit.

2.2 Expand resources and materials provided by self-help

centers and legal aid.

2.3 Expand online resources that help litigants understand the

impact of judgments.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

2.1 Improve the court answer form to

include plain language descriptions of

the common defenses to a debt lawsuit.

The 30,000 Minnesotans who are sued in district

court for debt each year must respond to their

lawsuits by providing an answer to the plaintiﬀ. 82%

of debt cases in district court end in an automatic

win for the plaintiﬀ because the defendant doesn’t

engage. The Minnesota courts currently have

an answer form (CIV302) defendants can use to

respond to a case against them.

It includes check-

the-box aﬃrmative defenses, but no plain-language

explanation of what those mean, making it diﬃcult

for a person without an attorney to identify if any

of those could apply to their case. Additionally,

the current answer form requires the defendant to

admit or deny each individual paragraph instead of

responding to the claim as a whole.

The Committee recommends that the Minnesota

Judicial Branch consider redesigning the answer

form to be more intuitive and accessible to

defendants without legal counsel, as states such

as Alaska have done.

Additionally, the committee

believes that although conciliation court does not

have an answer requirement, consumers sued in

this venue could beneﬁt from information about

available defenses. A standard notice or instruction

packet about consumers’ rights and options could

be made available in advance of the hearing, and

again before consumers enter any breakout room

negotiations.

2.2 Expand resources and materials

provided by self-help centers and legal

aid.

The Committee believes that plain language and

accessible documents should be used to help

consumers without attorneys better participate

in their debt cases. The committee recommends

creating these resources and making them available

both in print and online, in a variety of places where

self-represented litigants can easily ﬁnd them (legal

aid kiosks, self-help centers), to beneﬁt these

defendants when other kinds of legal services or

advice are not available.

2.3 Expand online resources that

help litigants understand the impact of

judgments.

The Committee believes that in addition to expanded

self-help and legal aid resources, Minnesota needs

additional tools to help consumers understand the

consequences they face when they fail to respond

to a case against them and receive a judgment.

Online calculators and similar tools can help

litigants understand the impact of post-judgment

interest and garnishment agreements, giving them

the information they need to ﬁle for garnishment

exemptions and to otherwise mitigate the ﬁnancial

damage that a default judgment can bring.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

Recommendation 3:

Preserve economic stability

so Minnesotans can aﬀord

basic needs while repaying

their debts�

The consequences of debt litigation can be disastrous

for consumers, with far-reaching impacts on housing and

employment. Minnesota does not currently provide any blanket

protection for amounts in a consumer’s bank account; and

even though wages are protected once deposited, there is an

administrative burden for that to happen. For consumers living

paycheck-to-paycheck, freezing sums in a bank account that is

to be used for basic needs can be very disruptive and create a

domino eﬀect of instability as they get behind on other payments.

3.1 Exempt an amount of money in a consumer’s bank

account suﬃcient to meet basic needs.

3.2 Electronically tag state beneﬁt funds in a bank account

to prevent exempt funds from being garnished.

3.3 Revise Notice of Entry of Judgment to include plain

language information about garnishment exemptions.

3.4 Increase the duration of the writ of execution from

six months to one year.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

3.1 Exempt an amount of money in a

consumer’s bank account suﬃcient to

meet basic needs.

Currently, 12 states oﬀer protections for wages

deposited into bank accounts.

Some Great Lakes

states, including Wisconsin, protect up to $5,000 in

deposited wages, but Minnesota doesn’t currently

have such protections for bank accounts in place.

Emptying a bank account exposes consumers to

housing instability from missed payments for rent

and utilities, employment instability due to insuﬃcient

funds to cover costs for transportation and childcare,

and additional ﬁnancial instability due to overdraft

fees and insuﬃcient funds to meet minimum

payments on other credit obligations.

The majority of the Committee recommends that

some amount of money be automatically exempt from

seizure to satisfy a judgment. This amount should be

determined by policymakers to allow consumers to

satisfy judgments against them while still paying for

food, transportation, housing, and other basic needs.

There was strong dissent regarding whether

additional protections were necessary, with some

committee members defending the interest of

creditors in having garnishment of a bank account

as a tool for debt collection. Protecting too great

an amount, for example, may render the majority

of consumers with debt judgments immune from

the enforcment of a judgment, and with little to no

incentive to participate in settling their case with the

plaintiﬀ. If the court were instead to conduct an ability

to pay inquiry, either during enforcement or earlier

in the litigation process, consumers would be able

to meet their obligations to plaintiﬀs while mitigating

further ﬁnancial instability.

3.2 Electronically tag state beneﬁt funds

in a bank account to prevent exempt

funds from being garnished.

State beneﬁts are typically exempt from garnishment,

but in the process of requesting an exemption,

a defendant’s eligible beneﬁts may be frozen or

garnished. Feedback from both the consumer and

creditor side noted that the judgment enforcement

process is much more streamlined when the

ﬁnancial institution can immediately identify whether

a consumer is exempt from levy.

The Committee recommends electronically

“tagging” state beneﬁt payments that go to the

consumer (such as those from the Minnesota

Family Investment Program, General Assistance,

Diversionary Work Program) to allow ﬁnancial

institutions to immediately identify exempt funds,

which would avoid freezing funds of consumers who

should not be currently subject to garnishment.

Financial institutions already employ similar

processes to identify federal beneﬁts, such as

Supplemental Security Income (SSI) and Social

Security Disability Insurance (SSDI).

3.3 Revise Notice of Entry of Judgment

to include plain language information

about garnishment exemptions.

Currently, the court’s Notice of Entry of Judgment

notiﬁes a defendant of a judgment against them

and contains a text-dense page on garnishment

exemption that is written in legal language that may

be diﬃcult for consumers to understand.

The Committee recommends updating the notice

packet to include a plain language explanation of

garnishment exemptions and a list of resources that

may help defendants identify and petition for such

exemptions.

3.4 Increase the duration of the writ of

execution from six months to one year.

Frequent renewal of garnishment writs is disruptive

and costly for debtors and creditors, as new writs

cannot be issued in a county until the plaintiﬀ

returns the existing writ (or ﬁles an Aﬃdavit of Lost

Writ) and pays the Writ of Execution fee. These fees

are ultimately added to the judgment amount.

The Committee recommends increasing the duration

of the renewal period from six months to one year to

lessen the burden for all parties involved.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

Recommendation 4:

Expand services for lower-

and moderate-income people

who are struggling with debt�

Minnesota’s existing legal aid programs assist hundreds of

consumers in debt each year, but they are unable to help everyone

in need due to capacity constraints. Expanding these programs

and widening the criteria for who is eligible for assistance would

help lower- and moderate-income consumers through the debt

litigation process.

4.1 Expand lower-income services through civil legal aid

programs by aligning priorities and adding resources

for coordinated statewide provision of advice and brief

services up to at least 200% of poverty guidelines.

4.2 Expand moderate-income services by increasing bar

associations’ unbundled services for people above

legal aid income guidelines and expanding the Legal

Paraprofessionals Pilot Program to include civil debt

cases.

4.3 Expand access to pre-judgment services for debt litigants

to encourage early resolution of claims.

MINNESOTA CONSUMER DEBT LITIGATION |

Recommendations

4.1 Expand lower-income services

through civil legal aid programs by

aligning priorities and adding resources

for coordinated statewide provision of

advice and brief services up to at least

200% of poverty guidelines.

In examining Minnesota’s debt landscape,

researchers found that the majority of debtors live

on incomes that are slightly above the cut-oﬀ for

service providers, such as legal aid. Even though

these debtors are technically not “low income,” they

are often working-poor families without speciﬁc

resources to pay for legal services. That reality, plus

the fact that only 4% of the legal services oﬀered

by Legal Aid in Minnesota were for debt cases, due

to case priorities, means that there are far more

Minnesotans in need of legal assistance than are

actually receiving it.

The Committee recommends that Legal Aid

examine the way cases are prioritized in the intake

process, and that they and other service providers

collaborate to develop a seamless referral system

among them to connect more consumers with the

help they need.

4.2 Expand moderate-income services

for consumers in debt by increasing

bar associations’ unbundled services

for people above legal aid income

guidelines and expanding the Legal

Paraprofessionals Pilot Program to

include consumer debt cases.

Current moderate means and unbundled programs

don’t have enough lawyers to oﬀer services for most

debt defendants. The current reimbursement rates

for unbundled services are not enough to attract

lawyers in private practice to oﬀer these services,

despite the potential demand.

The Committee recommends allocating additional

resources, whether from public funds or private

philanthropy, to subsidize reimbursement and

support sliding scale rates and to help these

services reach those who could most beneﬁt from

legal help.

Additionally, the Committee believes that legal

paraprofessionals may be able to help debtors

understand their options pre-judgment or exert

their rights post-judgment. The Committee

recommends expanding the Minnesota’s Legal

Paraprofessional Pilot Project, which began in

March 2021 and was created to “increase access

to civil legal representation in case types where

one or both parties typically appear without legal

representation.”

The pilot does not currently cover

consumer debt cases, but the Committee believes

these cases are ideal for this project.

4.3 Expand access to pre-judgment

services for debt litigants to encourage

early resolution of claims.

Mediation services provided by both community

agencies and the Minnesota Attorney General’s

Oﬃce can help consumers reach equitable

settlements with plaintiﬀs, but they are not easy for

consumers to ﬁnd. Currently, consumers are not

generally told about these services at any point

in the litigation process, and thus have to reach

out themselves. Community mediators sometimes

appear at conciliation court hearings and are

available to mediate cases, but since there are no

consolidated dockets for debt collection cases, they

are not always available.

The Committee recommends expanding mediation

services for debt collection cases, as well as

consolidating dockets to make it easier for service

providers to schedule availability when there is

a cluster of potential clients. Because mediation

is a voluntary process to which both parties in

a debt lawsuit must consent, additional input on

this recommendation from the creditors’ bar is

encouraged.

Additionally, the Committee recommends exploring

pilot debt diversion programs, based on either

national models

or modiﬁed versions of other

Minnesota diversion models (such as those used in

eviction).

MINNESOTA CONSUMER DEBT LITIGATION |

The Leadership Team would like to thank the Minnesota State Bar

Association and its Access to Justice Committee, including its

co-chairs, Veena Iyer and Kiri Somermeyer, for their support of

this project. In addition, we would like to thank Associate Supreme

Court Justice Paul Thissen for his leadership and encouragement

to help elevate the importance of consumer debt cases in Minnesota,

as well as Attorney General Keith Ellison and Deputy Attorney

General John Keller for providing their oﬃce's unique expertise

and perspective. The foundation of this report is the extensive data

analysis that provides the ﬁrst comprehensive look at consumer

debt court cases in Minnesota. That data collection and analysis

would not have been possible without the patience, assistance, and

coordination from the Minnesota Judicial Branch Court Research

Oﬃce, as well as the dedication and insights of January Advisors,

particularly David McClendon and Divia Kallattil, and Pew Staﬀ

and Contractors Suzanne Brown-McBride, Charlotte Stewart,

Giulia Duch Clerici, Lester Bird, and Erika Rickard. Finally, thank

you to the many MSBA member stakeholders, legal services staﬀ,

court oﬃcials, scholars, and consumers who shared their experience

with consumer debt cases in Minnesota.

Acknowledgments

MINNESOTA CONSUMER DEBT LITIGATION |

Methodology

Data sources

This analysis primarily relies on the Minnesota Judicial

Branch's Civil Judgments Extract, a comprehensive dataset

containing case-level information on civil judgments ﬁled

in Minnesota from 2011 to 2021. It includes details such

as ﬁling dates, case types, courts, party names, defendant

addresses, judgment amounts, and judgment satisfaction

status. In collaboration with the Minnesota Judicial Branch,

we obtained a customized version of this dataset that

encompasses all case ﬁlings, including dismissals and

those from Conciliation Court, which are typically excluded

from the Judgments Extract.

Additionally, we conducted a random sample of documents

to gather further information about each lawsuit. We

randomly selected and reviewed 1,001 cases ﬁled

between 2018 and 2021, accessing and analyzing publicly

available documents associated with each case. Through

this process, we developed a methodology to extract

additional ﬁelds of interest, including the original amount

in controversy, original creditor name, default judgment

disposition, writ of execution, ﬁnes, and fees.

When conducting our analysis, we typically considered

the entire ten-year time period to examine trends in debt

collection ﬁlings, case outcomes, and other relevant data

points. However, in order to provide a more meaningful

comparison and account for signiﬁcant changes in

social, economic, and structural factors, we focused our

benchmark years on 2017 to 2019. This period allowed

us to capture a recent snapshot of debt collection cases

unaﬀected by the unprecedented disruptions caused by

the Great Recession and the Covid-1pandemic.

For analyses related to neighborhood demographics,

such as race-ethnicity and income, we used data from the

2015-2019 American Community Survey. This ﬁve-year

period provides valuable insights into the characteristics

of neighborhoods associated with debt collection cases.

Interviews with legal aid providers serving indigenous

populations indicated that this group is, by-and-large, not

as impacted by consumer debt litigation as other groups,

due to a lack of access to credit and lending.

To gain insights into the support provided by Legal Aid

organizations for low-income defendants in debt collection

cases, we obtained anonymized intake data from Minnesota

Legal Aid organizations. We excluded clients who did

not receive assistance after the initial intake process. It

is important to note that the data provided by Legal Aid

organizations is anonymized within each organization,

preventing the identiﬁcation of individuals served by

multiple organizations.

Additionally, we incorporated data from the Consumer

Financial Protection Bureau's Consumer Complaint

Database to analyze trends and patterns in complaints

related to debt lawsuits. Furthermore, we used the 2017

Financial Well-Being Survey to estimate the number of

defendants who may qualify for legal aid services.

Identifying debt collection cases

To identify debt collection cases within the Judgments

Extract, we applied various ﬁlters. Initially, we focused

on speciﬁc case types, including Default Judgments,

Consumer Credit Contract, Confession of Judgment,

Conciliation Appeal, and Transcript Judgments, as well as

all cases ﬁled in Conciliation Court.

It is important to note that in District Court, the majority of

cases are classiﬁed as Default Judgments, which refers to

cases where the defendant failed to respond to the initial

summons. In other jurisdictions, Default Judgment is an

outcome rather than a case type. Additionally, our analysis

of documents revealed that the summons forms (created

prior to case ﬁling) indicate these as Consumer Credit

Contract cases. Collecting both case type and outcome

information at the time of ﬁling would enhance the court’s

ability to identify consumer debt cases accurately in the

future.

MINNESOTA CONSUMER DEBT LITIGATION |

Furthermore, we utilized plaintiﬀ and defendant names to

identify cases involving businesses ﬁling against individuals

or groups of individuals. Many Conciliation cases, for

instance, involve businesses suing other businesses or

individuals suing businesses, which are not classiﬁed as

consumer debt cases.

Additionally, Transcript Judgments, which involve the

transfer of cases from Conciliation Court to District

Court for garnishment purposes, were excluded from

most analyses to avoid distorting case ﬁlings and related

metrics. These cases were considered duplicates because

they involved the same underlying debt. By excluding

Transcript Judgments, our analysis provides a more

precise representation of unique cases, allowing for a more

accurate examination of trends and metrics associated with

debt collection cases.

Estimating racial disparities

In this report, although the court data does not directly

record the race-ethnicity of defendants, we were able to

estimate their race-ethnicity using a specialized algorithm.

The ‘Who Are You?’ R package emerged as a valuable

tool for this estimation process by leveraging information

such as the defendant’s address, the racial and ethnic

composition of their census tract, and their last name.

The algorithm employs a Bayesian approach to determine

the likelihood of an individual belonging to speciﬁc racial

and ethnic groups. By cross-referencing the defendant’s

last name with a census list that categorizes last names

by race-ethnicity, and considering the racial and ethnic

composition of their census tract, the package generates

estimations of the likelihood of their race-ethnicity,

including the categories Non-Hispanic White, Black,

Hispanic/Latino, Asian, or another race group.

Importantly, it is crucial to recognize that these estimations

are presented as likelihoods, taking into account the

inherent uncertainty involved. For instance, an estimation

might indicate a person having a 60% likelihood of being

Non-Hispanic White and a 40% likelihood of being Latino

based on their last name and location. This approach

allows us to appropriately divide the case into separate

components, reﬂecting the probabilities assigned to each

race-ethnicity category.

By incorporating this recognition of uncertainty, we are able

to make more informed estimates about population trends,

ensuring that our analysis acknowledges the inherent

variability associated with estimating race-ethnicity based

on available data.

For detailed insights into the methodology employed by the

‘Who Are You?’ package, please refer to the following link:

https://github.com/kosukeimai/wru. This comprehensive

methodology provides transparency and clarity regarding

the approach used for estimating race-ethnicity, enabling

a better understanding of the limitations and potential

implications associated with these estimations.

Estimating the Legal Aid gap

To qualify for most Legal Aid assistance in Minnesota,

defendants must have household incomes that are below

125% of the federal poverty line. The amount of income

it takes to qualify varies based on the number of people

living in the household.

Income and household size are not recorded by the courts

and do not appear in the Judgments Extract or court

documents. The share of defendants in debt collection

cases who live above and below the Legal Aid threshold,

then, has to be estimated. Our estimation strategy draws

on two important pieces of information.

First, we take into account the share of households living

at diﬀerent levels of poverty in each defendant’s census

tract, according to the American Community Survey. For

instance, if a census tract has 100 debt collection cases

ﬁled against its residents, and 20% of households in that

tract live below 125% of the federal poverty line, we can

assume that at least 20% of those debt cases are against

defendants who qualify for Legal Aid.

Second, we take into account diﬀerences in the likelihood

of facing a debt case between people of diﬀerent levels

of poverty. The biggest drawback to relying solely on

neighborhood poverty levels to estimate defendant poverty

levels is that we know people with lower incomes tend to

be more likely than their richer neighbors to fall behind on

debt payments and face a debt collection case.

Methodology

MINNESOTA CONSUMER DEBT LITIGATION |

But how large are these diﬀerences? To generate estimates

of the likelihood of facing a debt case by poverty levels,

we used the Consumer Financial Protection Bureau’s 2017

Financial Well-Being Survey, a nationally representative

survey of adults about their ﬁnancial well-being. Using these

data, we estimated that adults living below the poverty

line were 2.5x as likely as those living above 200% of the

poverty line to have been contacted by a debt collector in

the past year. Adults living between 100% and 199% of the

poverty line were 1.8x as likely as those living above 200%

FPL to have been contacted by a debt collector.

We then used these estimates to enhance the

neighborhood estimates of the number of debt cases

against defendants who qualify for Legal Aid. The example

below illustrates the impact of taking into account the

CFPB likelihood in a hypothetical census tract with 100

debt cases and 17% of households living below 125%

FPL. In eﬀect, it doubles the number of cases that are

estimated to be against defendants living below the Legal

Aid eligibility from 17% to 30%.

This approach, however, still takes into account the

neighborhood composition. In this case, the majority of

households in the census tract (84%) live above 125%

of the poverty line. Looking across all of Minnesota,

most cases are ﬁled in neighborhoods where very few

residents qualify for legal aid. In fact, nearly two-thirds of

debt collection cases are ﬁled in neighborhoods where

fewer than 1 in 10 families qualify for legal aid. This fact

helps explain why our estimate of the number of cases that

qualify for legal aid in Minnesota is so low (18%).

number of

households

% of

households

CFPB debt

likelihood

estimated cases based

on neighborhood

characteristics only

estimated number

of debt cases with

CFPB likelihood

<100% FPL 179 16% 2�5 16 30

100-125% FPL 10 1% 1�8 1 2

125-199% FPL 98 9% 1�8 9 12

200% FPL 840 75% 1 75 56

total households 1127 — — 100 100

% of families living below 125% of the poverty line

20k

15k

10k

0%-4% 5%-9% 10%-19% 20%-39% 40%-100%

# of cases

19,555

(31%)

19,2010

(31%)

15,805

(25%)

6,403

(10%)

1,154

(24%)

Example calculation of poverty levels for debt cases ﬁled in a census tract.

Nearly two-thirds of cases are ﬁled in

neighborhoods where fewer than 1 in 10

families qualify for legal aid.

Source: Minnesota Judicial Branch Civil Case Extract, 2017-2019;

American Community Survey.

Source: January Advisors

Methodology

MINNESOTA CONSUMER DEBT LITIGATION |

Appendix

Minnesota Statutes

Minn. Stat. §548.101 Assigned Consumer Debt Default Judgments

(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:

(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;

(2) admissible evidence establishing that the defendant owes the debt;

(3) the last four numbers of the debtor’s Social Security number,

if known;

(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;

(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;

(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

(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: [Notice of Intent to Apply for Default Judgment, omitted for clarity]

(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.

rules, the court may either:

(1) hold a hearing before entry of a default judgment; or

(2) enter an administrative default judgment without a hearing if the

court determines that the evidence submitted satisﬁes the requirements of

paragraph (a).

https://www.revisor.mn.gov/statutes/2017/cite/548.101

Rules of Civil Procedure

Rule 3. Commencement of the Action; Service of the Complaint; Filing of

the Action

3.01Commencement of the Action

A civil action is commenced against each defendant:

(a) when the summons is served upon that defendant; or

(b) at the date of signing a waiver of service pursuant to Rule 4.05;

the county where the defendant resides personally, by U.S. Mail

(postage prepaid), by commercial courier with proof of delivery, or

by electronic means consented to by the sheriﬀ’s oﬃce either in

writing or electronically; but such delivery shall be ineﬀectual unless

within 60 days thereafter the summons is actually served on that

defendant or the ﬁrst publication thereof is made.

Filing requirements are set forth in Rule 5.04, which requires ﬁling with the

court within one year after commencement for non-family cases.

https://www.revisor.mn.gov/court_rules/cp/id/3/

Rule 26.01(a) Required Disclosures; Initial Disclosure

(1) In General. Except as exempted by Rule 26.01(a)(2) or as otherwise

stipulated or ordered by the court, a party must, without awaiting a

discovery request, provide to the other parties:

(A) the name and, if known, the address and telephone number of

each individual likely to have discoverable information - along with the

subjects of that information - that the disclosing party may use to support

its claims or defenses, unless the use would be solely for impeachment;

(B) a copy - or a description by category and location - of all

documents, electronically stored information, and tangible things that

the disclosing party has in its possession, custody, or control and may

use to support its claims or defenses, unless the use would be solely for

impeachment;

the disclosing party - who must also make available for inspection

and copying as under Rule 34 the documents or other evidentiary

material, unless privileged or protected from disclosure, on which each

computation is based, including materials bearing on the nature and

extent of injuries suﬀered; and

(D) for inspection and copying as under Rule 34, any insurance

agreement under which an insurance business may be liable to satisfy all

or part of a possible judgment in the action or to indemnify or reimburse

for payments made to satisfy the judgment.

(2) Proceedings Exempt from Disclosure. Unless otherwise ordered by the

court in an action, the following proceedings are exempt from disclosures

under Rule 26.01(a), (b), and (c):

MINNESOTA CONSUMER DEBT LITIGATION |

(A) an action for review on an administrative record;

(B) a forfeiture action in rem arising from a state statute;

challenge a criminal conviction or sentence;

(D) an action brought without an attorney by a person in the custody

of the United States, a state, or a state subdivision;

(E) an action to enforce or quash an administrative summons or

subpoena;

(F) a proceeding ancillary to a proceeding in another court;

(G) an action to enforce an arbitration award;

(H) family court actions under Minn. Gen. R. Prac. 301-378;

(I) Torrens actions;

(J) conciliation court appeals;

(K) forfeitures;

(L) removals from housing court to district court;

(M) harassment proceedings;

(N) name change proceedings;

(O) default judgments;

(P) actions to either docket a foreign judgment or re-docket a

judgment within the district;

(Q) appointment of trustee;

(R) condemnation appeal;

(S) confession of judgment;

(T) implied consent;

(U) restitution judgment; and

(V) tax court ﬁlings.

(3) Time for Initial Disclosures - In General. A party must make the

initial disclosures at or within 60 days after the original due date when

an answer is required, unless a diﬀerent time is set by stipulation or

court order, or unless an objection is made in a proposed discovery

plan submitted as part of a civil cover sheet required under Rule 104

of the General Rules of Practice for the District Courts. In ruling on the

objection, the court must determine what disclosures, if any, are to be

made and must set the time for disclosure.

(4) Time for Initial Disclosures - For Parties Served or Joined Later. A party

that is ﬁrst served or otherwise joined after the initial disclosures are due

under Rule 26.01(a)(3) must make the initial disclosures within 30 days

after being served or joined, unless a diﬀerent time is set by stipulation or

court order.

(5) Basis for Initial Disclosure; Unacceptable Excuses. A party must make

its initial disclosures based on the information then reasonably available

to it. A party is not excused from making its disclosures because it has

not fully investigated the case or because it challenges the suﬃciency of

another party’s disclosures or because another party has not made its

disclosures.

https://www.revisor.mn.gov/court_rules/cp/id/26/

Minnesota General Rules of Practice for the

District Courts | Title VI Conciliation Court Rules

Rule 505 Commencement of Action

An action is commenced against a defendant when a statement of

claim as required by Rule 507 is ﬁled with the court administrator of the

conciliation court having jurisdiction and the applicable fees are paid to

the administrator or the aﬃdavit in lieu of ﬁling fees prescribed in Rule

506 is ﬁled with the administrator. Where authorized or required by Rule

14 of the General Rules of Practice for the District Courts, documents

may, and where required shall, be ﬁled by electronic means by following

the procedures of Rule 14.

https://www.mncourts.gov/mncourtsgov/media/Appellate/Supreme%20

Court/Court%20Rules/GRP-Tit-VI.pdf

Rule 508 (d) Summons; Service on Defendant

(d) Service on Defendant.

(1) If the defendant’s address as shown on the statement of claim

is within the county, the administrator shall summon the defendant

by ﬁrst class mail, except that if the claim exceeds $2,500 the

summons must be served by the plaintiﬀ by certiﬁed mail, and proof

of service must be ﬁled with the administrator. If the

summons is not properly served and proof of service ﬁled within 60

days after issuance of the summons, the action shall be dismissed

without prejudice.

(2) If the defendant’s address as shown on the statement of claim

is outside the county but within the state, and the law provides for

service of the summons anywhere within the state, the administrator

shall summon the defendant by ﬁrst class mail, except that if

the claim exceeds $2,500 the summons must be served by the

plaintiﬀ by certiﬁed mail, and proof of service must be ﬁled with

the administrator. If the summons is not properly served and proof

of service ﬁled within 60 days after issuance of the summons, the

action shall be dismissed without

prejudice.

(3) If the defendant’s address as shown on the statement of claim is

outside the state, the administrator shall forward the summons to the

plaintiﬀ who, within 60

days after issuance of the summons, shall cause it to be served on

the defendant and ﬁle proof of service with the administrator. If the

summons is not properly served

and proof of service ﬁled within 60 days after issuance of the

summons, the action shall be dismissed without prejudice. A party

who is unable to pay the fees for service of a summons may apply

for permission to proceed without payment of fees pursuant to the

procedure set forth in Minnesota Statutes, section 563.01.

(4) Service by mail, whether ﬁrst-class or certiﬁed, shall be eﬀective

upon mailing.

https://www.mncourts.gov/mncourtsgov/media/Appellate/Supreme%20

Court/Court%20Rules/GRP-Tit-VI.pdf

Appendix

MINNESOTA CONSUMER DEBT LITIGATION |

1 Minnesota Judicial Branch, https://www.mncourts.gov/About-The-Courts.aspx

2 Minnesota is in the middle of the pack with regard to protections from garnishment and levy, however. Michael Best and Carolyn

Carter, “No Fresh Start 2022: Will States Let Debt Collectors Push Families into Poverty as the Cost of Necessities Soars” (National

Consumer Law Center, 2022), 71, https://www.nclc.org/wp-content/uploads/2022/12/NoFreshStart-22_Rpt.pdf.

3 Minnesota Rules of Civil Procedure Rule 3. Commencement of the Action; Service of the Complaint; Filing of the Action (2013),

https://www.mncourts.gov/documents/0/public/rules/civil_rules_eﬀective_7-1-2013.pdf.

4 For matters with amounts in controversy up to $2,500, the court will serve the summons and complaint via ﬁrst-class mail along with

notice of the hearing date and time. For matters with amounts in controversy over $2,500, it is the plaintiﬀ’s responsibility to serve the

consumer with the summons, complaint, and notice of hearing, via certiﬁed mail. In either case, the consumer has a case number to

reference when seeking information from the court; see also https://www.mncourts.gov/mncourtsgov/media/CourtForms/CCT100.

pdf?ext=.pdf

5 Minnesota Rules of Civil Procedure 26.01(a) Initial Disclosure. (2013), https://www.revisor.mn.gov/court_rules/cp/id/26/.

6 See: P. Kiel, “So Sue Them: What We’ve Learned About the Debt Collection Lawsuit Machine,” ProPublica, May 5, 2016, https://www.

propublica.org/article/so-sue-them-what-weve-learned-about-the-debt-collection-lawsuit-machine.

7 January Advisors analysis of court docket data.

8 Federal Trade Commission, “The Structure and Practices of the Debt Buying Industry” (2013), https://www.ftc.gov/sites/default/ﬁles/

documents/reports/structure-and-practices-debt-buying-industry/debtbuyingreport.pdf.

9 This estimate is based on the mean judgment amount for medical debt cases in the sample multiplied by the estimated number of

cases in 2019.

10 Legal Services Corporation, “The Justice Gap: Meeting the Unmet Civil Legal Needs of Low-Income Americans” (2022), https://lsc-

live.app.box.com/s/xl2v2uraiotbbzrhuwtjlgi0emp3myz1.

11 Minnesota Judicial Branch, “Conciliation Court (Small Claims Court),” accessed September 22, 20223, https://www.mncourts.gov/

help-topics/conciliation-court.aspx

12 Minnesota Judicial Branch, “Court Forms,” accessed September 7, 2023, https://www.mncourts.gov/GetForms.aspx?c=7&f=825.

13 Minnesota Judicial Branch, “District Court Fees,” accessed September 7, 2023, https://www.mncourts.gov/Help-Topics/Court-Fees/

District-Court-Fees.aspx.

14 Minnesota Stat. Ann. § 548.101, Assigned Consumer Debt Default Judgments (2013), https://www.revisor.mn.gov/statutes/2018/

cite/548.101.

15 Oﬃce of Minnesota Attorney General, “Debt Collection - the Credit Handbook,” accessed September 7, 2023, https://www.ag.state.

mn.us/consumer/handbooks/CreditHnbk/CH5.asp.

16 Michael Best and Carolyn Carter, “No Fresh Start 2022: Will States Let Debt Collectors Push Families into Poverty as the Cost of

Necessities Soars.” https://www.nclc.org/wp-content/uploads/2022/12/NoFreshStart-22_Rpt.pdf

17 Conference of Chief Justices and Conference of State Court Administrators, In Support of Rules Regarding Default Judgments in Debt

Collection Cases, Resolution 4 (2018), https://ccj.ncsc.org/__data/assets/pdf_ﬁle/0017/23453/08222018-debt-collection-default-

judgments.pdf.

18 Ibid.

Endnotes

MINNESOTA CONSUMER DEBT LITIGATION |

19 Minnesota Stat. Ann. § 548.101, Assigned Consumer Debt Default Judgments.

20 If the consumer responds, certain mandatory disclosures are triggered which include additional information. These mandatory

disclosures were adopted as a way to streamline the discovery process in district court but were not designed with self-represented

litigants in mind. With the overwhelming majority of consumers lacking access to legal assistance, providing key information at the

time of service allows consumers to have the information they need to assess their options. Minnesota Rules of Civil Procedure

26.01(a) Initial Disclosure (2013); Minnesota Supreme Court Civil Justice Reform Task Force, “In Re: Minnesota Supreme Court Civil

Justice Reform Task Force” (2011), https://www.lrl.mn.gov/docs/2012/other/120214.pdf.

21 For example, Illinois has special cover sheet to ensure plaintiﬀs are complying with statutory documentation of debt requirements.

Circuit Court of Illinois, “Rule 280.2. Complaint in Credit Card or Debt Buyer Collection Actions” (working paper), https://www.

illinoiscourts.gov/Resources/4a602d48-5dac-4de3-b675-f864f1eb4dab/280.2.pdf.

22 Minnesota Judicial Branch, “Minnesota Digital Exhibit System,” accessed September 7, 2023, https://mndigitalexhibitsystem.courts.

state.mn.us/

23 The Committee does not recommend imposing a similar mandate on a consumer’s answer, as such a requirement might prove an

additional barrier to participation for self-represented consumers.

24 Minnesota District Court, “Answer or Answer and Counterclaim Civ302” (working paper, 2021), https://www.mncourts.gov/

mncourtsgov/media/CourtForms/CIV302_Current.pdf?ext=.pdf.

25 Alaska Courts, “Answer & Counterclaim to Complaint to Collect a Debt (Civ-481)” (working paper, 2016), https://public.courts.alaska.

gov/web/forms/docs/civ-481.pdf.

26 North Carolina Judicial Branch, “Judgment Calculator,” accessed September 7, 2023, https://www.nccourts.gov/services/judgment-

calculator .

27 Carolyn Carter, “Protecting Wages, Beneﬁts, and Bank Accounts from Judgment Creditors,” National Consumer Law Center, accessed

September 7, 2023, October 29, 2020, https://library.nclc.org/article/protecting-wages-beneﬁts-and-bank-accounts-judgment-creditors.

28 Oﬃce of Minnesota Attorney General, “Debt Collection - the Credit Handbook.”

29 Minnesota Department of Human Services, “Income Assistance,” accessed September 7, 2023, https://mn.gov/dhs/income/.

30 January Advisors analysis of legal aid case intake data.

31 Minnesota Judicial Branch, “Legal Paraprofessional Pilot Project,” accessed September 7, 2023, https://mncourts.gov/

lppp#:~:text=The%20Pilot%20Project%20permits%20legal,disputes%20and%20family%20law%20disputes.

32 Lancaster County, PA has recently launched a Consumer Credit Card Diversion Program to improve judicial eﬀectiveness and court

management of the high volume of civil debt cases. Lancaster Court Pennsylvania Court of Common Pleas, “Consumer Credit

Card Diversion Program,” accessed September 7, 2023, https://www.court.co.lancaster.pa.us/265/Consumer-Credit-Card-Diversion-

Program. See also: National Center for State Courts, “Tiny Chat 128: Credit Card Diversion,” accessed September 7, 2023, August

17, 2023, https://vimeo.com/855476079.

Endnotes

Minnesota State Bar Association

Access to Justice Committee