Maryland considers changing debt collection lawsuit legislation

by Maryland's highest court is considering adapting state law in response to a large number of companies buying consumer debt, suing for debt collection and winning judgments due to defendants not appearing in court despite flimsy documentation, according to the Baltimore Sun. Approximately two-thirds of the more than 200,000 contract case judgments signed off by the state's small-claims court each year are related to collecting debt, according to the Maryland District Court's chief judge, Ben C. Clyburn. Clyburn explained to the news source that some debt-buying companies rely on the likelihood of judges signing off on claims that don't have a defendant present without realizing they are deficient. "The sale of 'accounts receivable'... (has) created a crisis in our small-claims courts," Peter Holland, who runs a law school clinic specializing in debt cases at the University of Maryland, told the news source. "There's tens of thousands of cases filed without proof just in Maryland. Nationwide, it's in the tens of millions." At the beginning of July, a law went into effect in neighboring Delaware requiring all claims to collect consumer or credit card debt to name the original creditor, current debt owner and all previous owners, as well as the last four digits of the original account number, according to insideARM.