An overview of a typical debt collection lawsuit in Minnesota (and some tips for how to deal with it).

Dealing with a debt collection lawsuit can be a scary and confusing process, particularly in Minnesota where the initial stages of the case often take place outside of court oversight. My hope is that this post can shed a little bit of light on the debt collection litigation process and allow you to make a more informed decision about how to get your case resolved as quickly and painlessly as possible.

Before we begin…

First, reading things on the internet is not a substitute for consulting with or hiring an attorney. A blog post must necessarily be generic, but your case involves specific facts and circumstances that require specific legal advice. Don’t rely on this, or any post, on the internet when faced with a collection lawsuit. It’s best to consult with an attorney with experience defending debt collection lawsuits in your state at the very beginning of your case. I know this advice sounds self-serving, but I’ve been handling debt collection lawsuits for over 7 years–3 years on the creditor side, 4 plus years on the consumer side–and it’s extremely, extremely rare for a consumer to win in court without hiring an attorney. I know that money is a concern, but many consumer attorneys offer flexible payment options to make it affordable for consumers to get help for a debt collection lawsuit.

Second, this post describes the basic steps of a collection lawsuit in District Court in Minnesota. Every state has different laws and procedures and what happens in a Minnesota lawsuit may be very different from what happens in a collection lawsuit in another state. If your collection lawsuit is not in Minnesota, then this post will not help you at all and you shouldn’t rely on anything I’ve written here. And if your case is in Minnesota Conciliation Court, or small claims court, then the steps are different than what I’ve described here.

Step 1 — Service of the Complaint

In Minnesota, a debt collection lawsuit begins when the consumer is served with a copy of the Summons and Complaint. The Summons is a notice that a lawsuit has started and contains basic instructions about what to do next. The Complaint details who the parties are and what claims are being made. The Summons and Complaint are not required to be filed with a court and most debt collection lawsuits will not be filed with the court at the time they are served. Accordingly, the Summons and Complaint will not have a court file number on them. There is a lot of information on the internet that suggests that a Complaint without a file number is not valid. This may be true in other states, but it isn’t true in Minnesota.

I’m often asked what it means to be “served.” Served essentially means “notified.” In Minnesota, the most common way to serve a defendant with a Summons and Complaint is to personally hand it to the defendant. Another common method of service is to hand the Summons and Complaint to a person of “suitable age and discretion” that lives with the defendant. This is usually a spouse, older child, or roommate. In Minnesota, it’s possible to serve a Summons and Complaint by mail, but the defendant must sign an acknowledgment that they’ve received the complaint or it’s not effective service. It’s also possible to serve a defendant by publishing notice of the lawsuit in a newspaper or similar publication, but this is very rare in collection cases.

Step 2 — Answer the Complaint

Once a lawsuit is served, the defendant has 20 days from the day he was served to respond with an Answer. An Answer is a formal, written, legal document that specifically responds to each of the allegations in the Complaint and lists any defenses that the defendant has. Phone calls or letters are not considered Answers under the court rules.

If the defendant does not answer a lawsuit within 2o days of being served, then he is in default and a judgment may be entered against him. In a debt collection case, a default judgment is a final court order that the consumer owes the money. A default judgment is granted not because the creditor has better evidence or arguments, but because the consumer didn’t participate. It happens administratively and no judge will ever see the case. If you want to protect your rights and force the creditor to prove its case in front of a judge, then you must answer the lawsuit within 20 days of being served.

Step 3 — Discovery

Assuming that the consumer answers the Complaint properly, the next step in a debt collection lawsuit is discovery. If the case has not been filed with the court, there is no explicit time frame for discovery to happen and the parties are free to serve discovery whenever they wish. Once the case is filed with the court, the court will issue a deadline for discovery to be completed by.

Discovery is simply an opportunity for the parties to exchange information about the claims and defenses involved in a case. Discovery is not compulsory and a party is only required to provide information if they’re properly asked. The most common forms of discovery in a debt collection case are Interrogatories, Request for Production of Documents, and Requests for Admission. Interrogatories are basically just questions that one party asks of the other. Requests for Production of Documents, as the name implies, requires that certain documents related to the case be produced. And Requests for Admission are essentially true or false questions about the claims or defenses in the case.

To request discovery, a party has to properly serve their Interrogatories, Requests for Production of Documents, or Requests for Admission. Written discovery is usually served by mailing the requests to the other side. The other party then has 30 days from the day the discovery was served to respond fully. Simply mailing a letter to the other side asking them to provide information about the case is not sufficient and doesn’t trigger the other side’s duty to respond.

Requests for Admission are probably the most critical part of discovery, because if they are not responded to within 30 days, they are considered admitted. Creditors write their Requests for Admission carefully so that if the consumer doesn’t respond to them, they will end up admitting each element of the creditor’s claims. I’ve seen cases where the only evidence that the creditor put in front of the judge was the consumer’s failure to respond to the Requests for Admission.

The bottom line: if you receive discovery requests, you must truthfully respond to them in writing within 30 days. If you don’t, you risk losing your case on a technicality and being penalized by the court. And if you want to ask questions of the other side and see what documents they have, you must mail them proper discovery requests. If they don’t respond within 30 days, you can ask a court to make them respond and penalize them if they don’t.

Step 4 — Summary Judgment Motion

The next step in the majority of collection cases is the creditor’s summary judgment motion. This is a hearing in front of a judge where the creditor will offer all of its evidence and legal arguments and ask the judge to give them a judgment. Defending a summary judgment motion is a complicated and involved process, but essentially it requires the consumer to file a brief with his legal arguments, any written testimony that he wishes the court to consider, and any documents that he wants the court to review. There is a hearing where the judge will have an opportunity to ask questions of both sides. The judge then considers all of the arguments and evidence and decides whether the creditor is entitled to a judgment. If the judge rules in favor of the creditor, a judgment is entered and the case is over. If the judge rules against the creditor, then the case will proceed to trial.

Defending against a creditor’s summary judgment motion is probably the most difficult thing for a consumer to do himself. There are a myriad of rules, procedures, and deadlines that must be strictly followed. Many summary judgment motions are won by the creditor on a technicality rather than on the merits. For this reason, a consumer faced with a summary judgment motion should strongly consider hiring an attorney. If you want to hire an attorney to help you at this point, you should hire one immediately after getting notice of the creditor’s summary judgment motion. There are strict deadlines to file your response and an attorney will need as much time as possible to get up to speed. Don’t wait until the week before the hearing to call an attorney.

Step 5 — Pre-Trial and Trial

If you’re fortunate enough to defeat the creditor’s summary judgment motion, the case will proceed to trial. The judge will issue detailed instructions about the time leading up to trial. There are so many variables at this point that it’s difficult to describe all the potential scenarios. If you get to this point, you would benefit greatly from discussing your case with an attorney. You have a great deal of leverage to get the case resolved if you defeat the summary judgment motion and an experienced consumer attorney can help you maximize that leverage to get the best possible outcome.

A word about settlement

At any point in the process described above, the parties may agree to settle the case. Usually, this means that the consumer will pay an agreed-upon amount of money and, in exchange, the creditor will dismiss the lawsuit. The amount of money that the creditor will agree to settle for depends on many factors, but generally speaking, the better your legal defenses, the better deal you can get. An experienced consumer attorney will be able to advise you about what a reasonable settlement is in your case.