Friday, July 31, 2015

The substance of HF 652 becomes law tomorrow. Bankruptcy debtors finally get a break on fees for removing discharged judgments.

On August 1, 2015, the substance of HF 652 introduced by Rep. Mary Franson becomes law in Minnesota.

I have blogged about this issue before when the bill was first introduced, and I explained the issue:

"The issue is debtors having to pay exorbitant filing fees to state court administrators to remove state court money judgments entered on debts that were already discharged in bankruptcy.  While Minnesota Statute 548.181 Subd. 1 states that this removal of judgments should only cost $5.00 payable to the court administrator, the Minnesota State Court Administrator has taken the position that debtors with "default judgments" against them need to pay the full filing fee for an answer to a lawsuit in addition to the $5.00.  In my home County of Ramsey, this extra fee is $327.00, for a total of $332.00 per judgment to be removed.  If a debtor had several judgments, they could easily be forced to pay $1,000 to $2,000 or more to remove their judgments for debts that have already been discharged by the bankruptcy court."

This bill enjoyed broad-based bi-partisan support from the very beginning.  In the Senate, Sen. John Marty supported the bill and Sen. Warren Limmer introduced the Senate companion bill.  I appeared at a hearing in the Minnesota House Public Safety Committee and before the Senate Judiciary Committee in support of the bill, along with some of my fellow Minnesota NACBA (National Association of Consumer Bankruptcy Attorneys) members.  While the state court administrator had opposed not charging this extra filing fee, even he came around to support the bill.

The new language that was needed to fix this issue reads as follows:

"The defendant or other adverse or intervening party, or any one or more of several defendants or other adverse or intervening parties appearing separately from the others, shall pay, when the first paper is filed for that party in said action, a fee of $310, except in marriage dissolution actions the fee is $ text begin This subdivision does not apply to the filing of an Application for Discharge of Judgment. Section 548.181 applies to an Application for Discharge of Judgment"

I give special thanks to Rep. Mary Franson for introducing this common-sense bill that will benefit so many Minnesotans.  It will mean a lot to a lot of people who can spend their money on their families rather than on more bureaucracy.  Myself and my colleagues have clients who have been waiting for this law to take effect to get their judgments removed so they can fully take advantage of the fresh start that United States Bankruptcy law affords to honest debtors.

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