The Massachusetts Supreme Judicial Court revealed last week that it has amended some of the rules governing the use of small claims courts. The Court said that the changes were formed specifically to address the amount of debt collection cases that are filed in small claims courts.
The rule changes come on the recommendation of the Small Claims Working Group, a panel of legal experts that was created in 2006 to examine and improve current small claims practices. In a press release revealing the changes, the Supreme Judicial Court noted that While the rules apply to all small claims matters, there will be a major impact on debt collection cases. The changes address many of the problems recognized by the Working Group in collection cases, and four in particular: increased validness of service, inadequately detailed claims, increased close examination of default judgments, and notice to the court when a judgment is paid.
Adam Olshan, an attorney with Law Offices, Howard Lee Schiff, P.C. in Worcester, Mass., concurs that some collection law firms will be affected. This will effect the high-volume collection law firms.
But Olshan, who was on the Working Group representing credit card issuers, noted that most collection law firms ” including his own ” do not exercise the use of claims courts. If the plaintiff fails to verify the address, the court may not enter a default judgment if the defendant later fails to appear for trial.
The changes also add raised scrutiny to default judgments that are entered. New small claims laws require plaintiffs to notify the court in writing when a small claims judgment has been paid in full, or be responsible for any reasonable costs incurred by the defendant in later establishing that it was satisfied.
Another requirement is that the magistrate or judge is to analyze the terms of any agreement for judgment with the parties if they are present in court. This makes certain that the court does not order or otherwise endorse any private payment agreement that relies on exempt sources of income. This avoids any arbitrary surprise to the defendant by delaying any levy on the judgment until the defendant has had an opportunity to pay as ordered or to attend a payment hearing.
Rapid Recovery Solution is a commercial debt collection company.
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