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Putting consumer debt reforms into practice

Photo of past due bills

Background

To ensure reforms address challenges in consumer debt cases, courts must develop practices for implementation. But implementation can be challenging, particularly in the state court context, where different courts may have different business practices and case processing requirements. Courts must also remain neutral arbiters, and court staff often lack capacity to add additional efforts to their workloads. 

Our debt collection reform implementation toolkit offers guidance for implementing already-enacted debt collection case rules or statute-based reforms creates better access for all parties and increases procedural fairness. Additionally, the use of these implementation strategies may also result in long-term reductions of consumer debt caseload and increased process efficiency.

Defining rule & statutory reforms

Our implementation toolkit is designed to address the rule and statutory reforms listed below.

Type of reform Description of reform Purpose of reform/Why implementation is critical
Filing requirements & documentation of debt Requires plaintiffs in debt collection cases to provide the court with information about the debt at the time of filing, including proof of validity of the debt and proof of ownership of the debt by the plaintiff. In some jurisdictions, plaintiffs must also attach a copy of the contract or proof of debt. If courts do not enforce filing and verification requirements, courts and parties will continue to lack essential information about the debt at issue, leading to flawed or incomplete decisions and limiting defendants' ability to participate in the case.
 
Pre-default documentation  Requires that plaintiffs provide additional information or that
courts do an enhanced review when a default judgment is sought.
Without a process to ensure review of default requests and information required, courts run the risk of making default decisions based on limited information.
Prohibitions on suing on time-barred debt Prohibits plaintiffs from bringing cases when collection of debt is barred by statutes of limitations. Without a process to eliminate filings where collection is time-barred, defendants may have erroneous judgments issued against them and court docket space will be taken up with improper cases.
Enhanced service requirements
 
Creates enhanced requirements to prove service, such as demonstrating to the court how a defendant address was verified or requiring photo proof of personal service. Without good service, defendants will not be able to fully participate in a case, limiting due process and decreasing trust in the court.

This toolkit does not address how jurisdictions might approach rule and statutory reform. See additional resources for more information about the debt collection policy reforms described above and how to begin statutory or rule-based reform in your jurisdiction.1

Key recommendations for debt collection reform

  1. Make changes to court data practices or case management systems to identify and track debt collection cases.
  2. Create checklists to ensure debt documentation requirements are met. These may include party-directed checklists and court-directed checklists.
  3. Create enhanced court forms for debt collection cases.
  4. Build in judicial review before issuing defaults.
  5. Improve service requirements.
  6. Identify ways to resolve cases outside of court. These may include mediation and online dispute resolution, and diversion programs.
  7. Consider general high-volume docket reforms.

Next steps

Statutory and rule-based reforms in debt collection cases have the potential to help courts better manage these cases and increase parties' ability to participate and have fair and just outcomes. The implementation practices in this guide will help courts turn reforms into reality and create meaningful change for courts and litigants. 

Download the full implementation toolkit

Interact with our checklist generator 

Strengthen your court's consumer debt reforms

Our team can help you incorporate consumer debt reforms into your existing court business practice. 

Footnotes

Pew Charitable Trusts, To Reform Debt Collection Litigation, Courts Need Better Data, October 25, 2022

Pew Charitable Trusts, How Debt Collectors Are Transforming the Business of State Courts, May 6, 2020

Paula Hannaford-Agor and Brittany Kauffman, Preventing Whack-a-Mole Management of Consumer Debt Cases, 2020

Conference of Chief Justices and Conference of State Court Administrators, Resolution 4: In Support of Rules Regarding Default Judgments in Debt Collection Cases, August 22, 2018

Tiny Chats on debt collection case reform: Tiny Chat 11: Debt Collection Cases; and Tiny Chat 37: Debt Collection Cases Best Practices