Judgments in Minnesota
A judgment is a court order stating that you owe a debt as a matter of law. In Minnesota, it usually happens in one of two ways. Either you didn’t respond to a summons and complaint within the required time and the court entered a default judgment, or the case proceeded through the litigation process and the court ruled in the creditor’s favor.
In Minnesota, a civil judgment lasts for ten years. It can be renewed for additional ten-year periods. During that time, interest accrues in an amount set by state law (currently 4%). So what started as a manageable amount can grow into a much larger obligation.
In my experience, if you’ve discovered that a judgment has been entered against you, quick action—rather than burying your head in the sand—usually results in a better outcome.
Why Judgments Matter
A judgment gives a creditor access to powerful, involuntary collection tools.
With a valid judgment, a creditor can take money from your paycheck, freeze your bank account, and place a lien on your home. Judgments also become part of the public record, which might affect your ability to get credit, housing, or employment.
In my experience, many people don’t address a judgment until garnishment begins. But by that point, the leverage has shifted to the creditor. Acting earlier to address the judgment usually gives you more options.
Most Judgments in Minnesota are Entered by Default
Most judgments in consumer debt cases are entered by default. This means the defendant did not serve an answer to the complaint within the required time, which, in Minnesota, is typically 21 days after service. One study by a local law school suggests that over 90% of Minnesota collection cases end in default judgments.
This is why responding to collection lawsuits on time is so critical.
Can a Judgment Be Challenged?
Occasionally.
Depending on the circumstances, it may be possible to vacate, or undo, a judgment. This typically requires showing a valid legal defense and a reasonable explanation for why you didn’t respond to the lawsuit on time. Improper service can also be grounds for relief.
Not every situation calls for vacating the judgment. I’ve talked to many, many people over the years who wanted to vacate a judgment, but after talking through the situation, they learned that they would be better off focusing on resolving the judgment rather than undoing it. This is because vacating a judgment requires a time-consuming, and, therefore, expensive process.
Managing or Resolving a Judgment
If your judgment can’t be vacated, there are still ways you can reduce its impact on your finances.
You may be able to limit garnishment through exemptions or negotiate a settlement that resolves the judgment for less than the full balance. The strategy depends on your income, assets, and overall financial situation.
In some cases, particularly where multiple judgments or debts are in play, bankruptcy may be the more efficient solution. Bankruptcy stops garnishment and wipes out most judgment debts.
In my view, the key is not reacting piecemeal to each collection action, but stepping back and assessing the big picture.
Related Topics
Garnishment in Minnesota – How wage and bank garnishments work, and what you can do to stop or reduce them.
Vacating a Judgment – When and how you may be able to undo a judgment.
In Minnesota and ready to talk to a lawyer about a judgment?
Schedule a consult with debt defense lawyer Todd Murray.
Since 2009, I’ve helped hundreds of Minnesotans defend debt collection lawsuits. My work has saved my clients millions of dollars and many sleepless nights. My clients have described me as “a clear communicator,” “a man of integrity,” and “very professional.” I live in Minneapolis with my wife and four children.