On August 1, 2015, a new law went into effect that expanded the territorial jurisdiction of a county’s reach to sue its debtors. The new law will permit Minnesota counties to sue its debtors in their conciliation court, often referred to as small claims, even though the debtor is not a resident of the county.
What is the New Law?
Under Minnesota Statutes, Section 491A.01, subd. 11, a county may sue a debtor for “fees, services, overpayments, or similar obligations, even though the defendant is not a resident of the county…” However, before the county may bring such an action, it must provide the debtor prior written notice of the overdue debt by first class mail at the debtor’s last known address and notify the debtor that the county may bring an action in conciliation court to recover the debt.
What Does This Mean for Counties?
The new law will make it easier for counties to expand their reach to collect debts and seek judgments on unpaid obligations. Before this law, counties were generally limited to pursue unpaid debts in conciliation court against those who resided in the county limits. This territorial limitation often left counties without recourse to recover smaller debts once the debtor moved out of the county.
What Does This Mean for Debtors?
For those alleged to owe a debt to the county, they may no longer be insulated from a small claims court action against them after they move out of the county. One safeguard implemented in the statute is the pre-suit written notice requirement. However, the county must merely send the notice to the “last-known address” of the debtor. Therefore, if the county does not have the most current address of an alleged debtor, the debtor may never receive the notice.
This post was created by Christopher Boline, a commercial and business litigator at Dudley and Smith, P.A. Mr. Boline has represented creditors and debtors ranging from large national banks to individual consumer debtors. If you have questions about debt collection or civil litigation, please contact Mr. Boline at 651-291-1717 or by email at cboline@dudleyandsmith.com. Dudley and Smith, P.A. is a full service law firm with offices in St. Paul, Bloomington, Burnsville, Chanhassen, White Bear Lake, and Woodbury.
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