/ July 28, 2008

Surge in Debt Leads to Courtroom Overhaul

As debt collection lawsuits have become all too common in recent months, the overburdened judicial system has been forced to adapt in creative ways. The increase in debt cases has drawn attention to inconsistencies in court rules that drain the system of funds and valuable time, so lawyers, consumer advocates, and bar associations have teamed up to streamline state and local debt-relief norms.

The solution to the bloated courts does differ depending on who you ask. For creditors’ attorneys, the priority is standardization within the state. When court rules differ between individual counties, lawyers lose precious time determining what forms are necessary in which courts. The National Association of Retail Collections Attorneys has worked to revive state bar associations for creditors’ attorneys, to encourage local regulation of rules and standards.

Consumer advocates and debtors’ lawyers have also spoken out in favor of reform. According to the National Law Journal, “consumer advocates are focused on making sure that debtors are properly notified of lawsuits, have sufficient time to respond and can overturn the judgments later if necessary.” These groups favor standardization as well, hoping it will relieve the confusion many debtors face in the unfamiliar courtroom.

In several states, legal professionals have collaborated to fix the system. The state of California modified its court rules last July to simplify the proceedings and cut down on court appearances. Massachusetts is another state that has reviewed its debt collections procedures, putting together a panel of interested parties to recommend changes, which included a standard form for record payment agreements. The two are paving the way for reforms in states nationwide, bringing a much needed overhaul to the system just in the nick of time.

Source: The National Law Journal

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