Our office often works with our financial institution clients to determine not only how to collect on a judgment, but also when to collect on a judgment. There is no requirement to immediately undergo collections upon judgment entry. Judgments in all states remain valid for a certain amount of time. In Minnesota, a judgment remains valid for 10 years from its original entry date.
After all, the fact that a judgment debtor may not have the means to immediately pay a judgment does not necessarily mean the judgment debtor will not be able to pay the judgment at some point in the future. For example, although a judgment debtor may be unemployed at the time of judgment entry, he or she may have future earning potential. In these types of situations, it may be more advantageous to delay collections activities until the judgment debtor is in more stable financial circumstances rather than immediately commence collections action upon entry of judgment.
In order to enforce a judgment more than 10 years after its original entry, the judgment creditor must take the appropriate steps to renew the judgment before the 10 year expiration deadline has passed. The proceeding itself is usually fairly simple. Generally, a judgment can be renewed by starting a new lawsuit, based on a claim for failure to pay the judgment. Starting a new lawsuit does require serving a Summons and Complaint on the judgment debtor. As such, judgment creditors should be sure to locate the judgment debtor well before the 10 year anniversary of the entry of the judgment. Defending against the renewal of a judgment is difficult as the only real defense is that the judgment has been paid or partially paid. Once the judgment is effectively renewed, the judgment is good for another 10 year period.
Renewing a judgment can be an effective way to keep collections options open in the event a judgment debtor’s financial circumstances improve. For further guidance regarding renewal of judgments or other post-judgment collections advice, please don’t hesitate to contact us.