Minnesota Debt Collection Laws

There are many reasons for an individual or family falling into serious debt problems, many of them not of their own making. Illness, job loss, market fluctuations, and more can all have debtors scrambling to find reasonable solutions that will not cause them to lose their home and any hope of restoring their credit rating. However, there are predators that seek to prey on these people, causing both federal and state legislatures to enact laws protecting debtors from unreasonable collection measures. The two primary laws are the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. In addition, while any individual can read and take advantage of these laws to protect themselves, those in serious situations may want to contact an attorney to help solve their collection or harassment struggles.

Debt Collection in Minnesota

Minnesota relies heavily on federal statutes to protect its citizens from unfair debt collection practices. However, they have written their own state statutes in support of, and often extending, those laws. If violations occur, victims may contact the office of the Minnesota Attorney General or the Minnesota Department of Commerce.

Minnesota Statute of Limitations

Certain debts have a statute of limitations period before creditors and collections companies no longer have the legal right to lien on a given debt, which ultimately makes the debt invalid. Depending on the nature of debt obligation, there are different periods of statute of limitations for debts created in the state of Minnesota including:

• Legal judgments, which form a debt liability, have a statute of limitations period of ten (10) years
• Breach of contract for sales has a statute of limitations of four (4) years
• Any other legal contract or obligation, whether express or implied, covered by the Uniform Commercial Code contains a statute of limitations period of six (6) years

Collections Practices and Rules for Minnesota

Minnesota maintains a number of statutes reinforcing and expanding upon the federal debt collection laws and practices, including the requirement that all collection agencies and debt collectors be licensed by the state in order to collect debts for others.

Legal Collections Actions

• Contacting debtors by mail, phone, telegram, fax, or email during reasonable hours, generally between 8:00 a.m. and 9:00 p.m.
• Contacting others to learn a debtor's address, phone number, employer, or other contact information, as long as they do not reveal the reason they seek to contact that debtor or any details about the debt involved

Illegal Collections Actions

• Contacting debtors at work if they have been informed that the employer does not allow such contact
• Any harassment or abuse of the debtor or any other person they contact about the debtor's obligations, including using profanity, threats, violence, repeated and unwanted calls, or any public notice of the debt
• Using any misleading statements or representations to compel or intimidate the debtor or anyone else to pay the debt or reveal information concerning the debt or debtor
• Using deception or unfair practices such as charging more than the appropriate amount, cashing a post dated check before the agreed upon date, applying payments to other debts, or conducting any activities that incur additional charges to the debtor

Laws for Debt Harassment in Minnesota

It is illegal in the state of Minnesota to harass or unreasonably inconvenience a debtor in order to collect a debt.

Minnesota Debt Negotiation and Settlement Rules

There are many debt consolidation companies and debt settlement agents that wish to take advantage of those facing unmanageable debts today. Some may be helpful, while others may be scams preying on the unwary, often charging high fees and showing low success rates. It is important for debtors to use reliable services and conduct thorough research before entering such agreements. It may also be wise to consult an attorney. However, the most common options include:

• Debt settlement companies that promise to negotiate with creditors for a lower payoff, as long as it is channelled through them
• Debt negotiation, whereby a financial advisor negotiates with creditors to consolidate or re-finance outstanding debts
• Debt negotiators may also talk with creditors holding secured debts, attempting to receive forbearance or hardship consideration
• Monitoring any debt repayment plans to ensure that negative marks or outstanding loans are appropriately updated with the major credit reporting agencies

Help from a Minnesota Debt Collection Attorney

While it may seem illogical to incur the expense of a lawyer when one is already suffering financial hardship, the alternatives can be much more costly and have long-term consequences. A reliable debt settlement attorney can provide the help needed now and in the future to clear out-of-control debt and repair a credit score for the future.