Massachusetts Proposes New Rules for Collection Litigation on Credit Card Debt

The Standing Advisory Committee on the Rules of Civil and Appellate Procedure for the Commonwealth of Massachusetts Court System has proposed two new rules of civil procedure regarding actions for money damages against individuals arising from credit card debt. Per the announcement:

“The proposed amendments were drafted by an ad hoc working group that was formed to consider rule revisions to address abuses in debt collection cases and difficulties that a defendant may confront when a credit card debt has been assigned and the identity of the original creditor is unclear from the complaint.

Problems in these cases include poorly documented debts, suits commenced after the expiration of the statute of limitations, and lack of notice to defendants. In developing its proposals, the working group considered rules adopted in other states and certain provisions of the Massachusetts Uniform Small Claims Rules. The working group elected to address only cases involving individual credit card debt because anecdotal evidence suggested that most of the problems in debt collection cases involve credit card debt. Given the many kinds of debts involving both personal and real property, the working group focused on credit card debt.”

Proposed Mass. R. Civ. P. Rule 8.1

Proposed Mass. R. Civ. P. Rule 8.1 would require plaintiffs to file two additional affidavits and a certification with their complaints in credit card debt collection cases against individuals. 

• The first affidavit requires certain specific information about the debt(s) at issue so that defendants can admit or deny the allegations and assert affirmative defenses. 

• The second affidavit regarding address verification is intended to increase the likelihood that defendants receive notice when actions are commenced. This affidavit is based on the Joint Standing Order on Verification of a Defendant's Address issued by the Boston Municipal and District Courts.

• The certification that would be required relates to the statute of limitations, and is intended to make it less likely that plaintiffs will commence actions on debt that is time barred. A plaintiff would be required to state the date the cause of action accrued, the length of the limitation period, and to certify that the limitations period has not expired.

Proposed Mass. R. Civ. P. 55.1

Under proposed Mass. R. Civ. P. 55.1, without the required affidavits and certification, defaults and default judgments may not be entered.

The complete proposed rules appear as links in the announcement. Draft forms for the affidavit regarding debt, and for verification of defendant's address, required by Rule 8.1 also appear as links in the announcement.

The announcement invites comments to the proposed rules. Comments should be directed to Christine P. Burak, Supreme Judicial Court, John Adams Courthouse, One Pemberton Square, Boston, MA  02108 on or before February 28, 2017. Comments may also be emailed to christine.burak@sjc.state.ma.us.

insideARM Perspective

insideARM suspects that more and more states will be proactive in this area. Alleged abuses in the use of collection litigation has been the topic of numerous articles and news reports; from “sewer service” to suits on debts outside the statute of limitations.  Regulators have also taken aim at collection law firms.

insideARM has written extensively on the issue. See our April 28, 2016 discussion on Propublica's article on debt collection litigation on medical accounts. See also our December 28, 2015 article on the CFPB Consent Decree with the collection law firm Frederick J. Hanna & Associates P.C..

This issue is not going away anytime soon.