Discharging judgments in Minnesota

Very often a client who needs to file bankruptcy will have one or more judgments already entered against them in state court.

Bankruptcy is done in the federal court system;  judgments (for the most part) are entered in the state court system.  The two court systems do not "talk to each other".

So, what happens to a judgment in bankruptcy?

Briefly, a money judgment is a court order that determines that you owe a certain amount of money to a particular person or company, and authorizes that person or creditor to take your non-exempt property.  Bankruptcy wipes out the personal obligation for a judgment*, and means that a creditor cannot take active steps to collect the judgment.  However, a bankruptcy discharge does not remove the judgment from the records of the state court..  

We have a very simple procedure here in Minnesota to get the judgments off the state court record.  The law which authorizes this is Minn. Stat. 548.181.  What we have to do is to get a copy of your bankruptcy discharge, fill out a particular form, and mail both items to the last known address of the judgment creditor, and pay the court $5 per judgment.  If the judgment creditor does not file an objection within 20 days, the Court Administrator discharges the judgment upon the court records.

A caveat:  The state court administrator has recently come up with a theory that this application is a "paper filed with the court", and is apparently demanding that applicants pay a full court filing fee ($324.00 in most counties) instead of $5.00.  Ouch!  I understand that the state court system would like to have more funding, but I hope this new interpretation is rolled back, either by specific legislation or by one or more lawsuits.

*  Of course, some judgments are for non-dischargeable debt.