Collection Lawyers, Judges and Debtor Advocates Discuss Changes in Legal Collection Rules

To handle the rising number of debt collection cases in many jurisdictions around the country, three groups of interested parties – debt collection lawyers, judges and consumers – are giving their input on changes to court rules that will streamline the “court clog” brought on by debt collection lawsuits.

The courts of Cook County, Ill. were the focus of media attention last month when it was revealed that the legal system was becoming clogged with debt collection lawsuits (“Debt Collection Cases Double in Northern Illinois,” June 9). Illinois, along with several other states, is looking to change legal collection rules to streamline the process, according to an article in The National Law Journal.

Judges want their courts cleared of the backlog of numerous, but relatively small, debt collection cases. Cook County Circuit Judge Daniel Gillespie said that debt collection cases in his court had doubled in the past two years.

Debt collection lawyers are simply seeking a standard format for the process, Robert Markoff of Chicago-based creditors’ rights firm Baker, Miller, Markoff & Krasny told insideARM. Markoff is also president of ARM industry trade group the National Association of Retail Collection Attorneys (NARCA).

“All we want is a relatively standard format for complaints and responses,” said Markoff. “If a consumer doesn’t respond to standardized complaints, then you would see default judgments.” He said that it can be frustrating dealing with different sets of rules from county to county in his home state and that many judges bring their own viewpoint to cases in determining default judgment.

Markoff noted that consumers may bring default judgments on themselves. He said that many debtors address legal debt collection action the same way they would treat collection action from a collection agency: asking the attorney to cease communication. Markoff said that this was a bad strategy. “If you tell an attorney not to call or write, we have the ability to bring the case before a judge in court for resolution,” he said. “That’s not the case with a collection agency.”

Default judgments are also on the minds of consumer advocates. They are working to ensure consumers are properly notified when they are sued and have adequate time to respond to the suit. They are also seeking assurances that there is plenty of documentation backing up the debt collection lawsuits. The National Law Journal quoted Thomas Kane, attorney with the Federal Trade Commission (FTC), as saying, “We have heard that in many cases collections attorneys have very little to back up their lawsuits."

The FTC may have a say on the matter when it makes its anticipated recommendations for changes to the Fair Debt Collection Practices Act (FDCPA). But Markoff does not believe the FTC will recommend a universal set of standards for debt collection cases.