The New York Civil Court has proposed significant changes affecting debt collection litigation in consumer cases. In an attempt to put consumers on equal footing, offering them additional protection, Chief Judge Jonathan Lippman has proposed reforms affecting the over 100,000 consumer claims filed annually, half of which result in default judgments.
The reform will affect creditors, debt buyers and consumers.
Proposed changes include:
- Calling for the creditor to prove ownership of the debt,
- Requiring debt buyers to prove that the debt was acquired in a legal fashion,
- Modifications to Affidavits required for entry of judgment,
- The creditor must swear that the debt falls within the applicable statute of limitations,
- Creating forms that are easy for the consumer to understand and use to defend the case,
- The Court will mail a copy of the summons and complaint to the named consumer defendant,
- The Court will not allow the entry of judgment against any of the individual consumer defendants if the mail has been returned,
- The Court requires a copy of the original agreement between the parties.
These proposed amendments for debt collection litigation will be effective on June 15, 2014. Full details available on the Court website.