Halpern Law Firm, PLLC is a Minneapolis Law Firm Specializing in Debt Collections.
Wednesday, February 18, 2015
Judgment Levies
Chapter 551 of Minnesota Statutes allows collection counsel to levy on money, other personal property, and earnings by using a quick alternative to a formal writ of execution through the sheriff’s office or a formal garnishment procedure. Notice of execution levy on a third-party holding money of the debtor is served by certified mail by collection counsel, along with two copies of an exemption notice if debtor is an individual. The maximum amount that can be levied upon in the possession of a particular third party is $10,000. There is an affirmative duty imposed by Minnesota Statutes, section 551.04(6) on a third-party holding money to immediately remit funds to collection counsel who served the notice of execution levy and copy of the writ of execution, if the debtor is a corporation, or 15 days after the third-party mails the exemption notice to debtor (assuming no exemption is claimed, and assuming the levy is neither upon funds on a financial institution, nor earnings).
Seminar Article By: John A. Halpern
Contempt of Court Motions
Minnesota Statutes, chapter 588, and rules 45.07 and 69 of the Minnesota Rules of Civil Procedure allow the district court to hold the debtor in contempt of court for failure to obey a subpoena or a court order in supplementary proceedings. Collection counsel will have to draft the following documents: notice of motion and motion, affidavit of non-appearance (executed by the court reporter or notary public) attesting to debtor’s failure to appear, memorandum of law, order to show cause why the debtor should not be held in contempt of court, and proposed order holding debtor in contempt of court (most judges prefer findings of fact, conclusions of law, and order of contempt and apprehension). Said documents must be served personally on the person failing to obey the prior subpoena or court order in supplementary proceedings. No substituted service of process thereof is allowed. Sanctions on debtor that the district court may impose include incarceration and/or fine.
Seminar Article By: John A. Halpern
Orders for Disclosure
Minnesota Statutes, section 550.011, allows a judgment creditor to request of the district court an order requiring the debtor to provide the creditor with information regarding the “nature, account, identity of, and location of all of the debtors’ assets, liabilities, and personal earnings.” The order for disclosure is a valuable, low cost means of gathering information in the post-judgment stage, and is available after a judgment has been docketed for 30 days. Collection counsel should mail to the district court administrator a completed request for order for disclosure, accompanied by the required fee. An order for disclosure, along with a financial disclosure form, are then mailed by the district court administrator to the debtor. The debtor then has ten days to complete the financial disclosure form and return it to the creditor or creditor’s attorney. The financial disclosure form requires bank, assets, liabilities, and place of employment information. Failure to return the completed financial disclosure form within ten days may subject the debtor to contempt of court proceedings, similar to the debtor’s failure to obey a subpoena or order in supplementary proceedings. Costs for both the order for disclosure and enforcement of same vary from one district court to another.
Seminar Article By: John A. Halpern
Interrogatories and Supplementary Proceedings
Rules 69 and 33 of the Minnesota Rules of Civil Procedure also allow collection counsel to draft extensive interrogatories to be answered under oath, as in prejudgment discovery. They may be served upon debtors by mail or by personal service. Failure of a debtor to answer the interrogatories under oath within 30 days of the date of service may subject debtor to a motion to compel, followed by a possible contempt of court motion.
Minnesota Statutes allow judgment creditors to apply to the court by affidavit for an order compelling judgment debtors to appear before a court reporter or notary public to be examined under oath as to assets, liabilities, cash flow, tax returns, etc. A writ of execution must first be “returned unsatisfied” by the sheriff’s office. The order in supplementary proceedings has the same effect on a debtor as a subpoena and notice of taking deposition to compel debtor’s testimony and the production of a debtor’s records. The order in supplementary proceedings must be served upon a deponent personally. No substituted service of process is allowed. A deponent should be first shown the inked signature of the judge signing the order, and then given a conformed copy of the order, along with a copy of collection counsel’s affidavit submitted to the judge in support of said order. The deposition must be in the venue of the county where a debtor resides or where a debtor’s business is conducted. A powerful specialized order directed at any of debtor’s assets, regardless of who possesses same, also can be obtained ex parte from the court, pursuant to Minnesota Statutes, section 575.05. If the debtor has hidden known assets or placed them in the possession of third parties, the court “may order any of the debtor’s property in the hands of the judgment debtor or any other person, or due to the judgment debtor, not exempt from execution, to be applied toward the satisfaction of a money judgment.”
Seminar Article By: John A. Halpern
Using Subpoenas
Rule 69 of the Minnesota Rules of Civil Procedure provides that in the post-judgment collection stage, the judgment creditor may examine any person, including the judgment debtor, in the manner provided in the rules for taking depositions or other discovery. There is no requirement that a writ of execution be “returned unsatisfied” by a sheriff, which return is a condition precedent to obtaining a court order in supplementary proceedings. Experienced collection counsel use both subpoenas (directed at individuals) and subpoenas duces tecum (to compel production of itemized documents), along with a notice of taking deposition (directed at corporate debtors’ officers or individual debtors). When a judgment is against an individual, a person of suitable age and discretion (in effect, an individual aged 14 or older) living in a debtor’s home can be served with subpoenas and notices of taking depositions directed at a debtor.
Seminar Article By: John A. Halpern
The Right Attitude Toward Collection
Collecting a judgment involves: a working knowledge of selected Minnesota Statutes and Rules of Civil Procedure, how and when to use specific post-judgment creditors’ remedies, procedures in sheriff’s offices, how to enlist the assistance of district court judges, the enforcement of subpoenas and orders, asset liquidation as a last resort, and how to acquire helpful information from public bodies and private enterprises.
Seminar Article By: John A. Halpern
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