Each year, thousands of Maryland consumers are sued for unpaid debts. The vast majority of these cases are brought in small claims court by third party debt buyers. Usually, these debt buyers lack the proper documentation and evidence to show that (1) a debt is actually owed, (2) the amount claimed is accurate, and (3) the person they are suing is the person who owes the debt. Both nationally and in Maryland, the cases are rampant in which a debt collector sues the person it believes is the debtor, knowing full well that the defendant often will not appear to defend herself at trial. In those cases, Maryland law currently allows the creditor to obtain a “Judgment by Affidavit.” This basically means the debt collector submits an affidavit, signed under oath, from an employee of the company confirming that they have reviewed their records and those records show the company is entitled to collect that particular amount from this particular debtor. But these affidavits are regularly “robo-signed” by people with no knowledge of the accounts. In other words, the debt buyers are saying to the court “hey just trust us” and right now, the courts are doing just that. To compound the problem, although the debt collectors regularly file affidavits saying that they have served the defendant with notice of the lawsuit, in many cases those affidavits are also robo-signed and the defendant does not learn of the lawsuit until after a judgment has been entered and her bank accounts or paycheck are garnished.
If courts required creditors to submit proper documentation of a debt that proved the creditor had a right to enforce it, struggling consumers would be better protected and the integrity of the court system would be upheld. The Maryland Court of Appeals Standing Committee on Rules of Practice and Procedure has proposed changes to the Maryland District Court Rules of procedure would do just that. If adopted by the Court of Appeals, the new rules would require a creditor seeking a judgment by affidavit to provide documentation that proves it has a right to collect the debt and that the person they are suing actually owes that money. The new rules would protect Marylanders by holding debt collectors and creditors to the same standard as every other litigant in Maryland Courts. The rules would not prevent debt collectors from collecting on valid debts. Instead, the rules would help ensure that the debt collectors do not collect debts that are no longer enforceable either because they have been discharged in bankruptcy or because the statute of limitations has passed; collect on the same debt more than once; or collect money from people who never actually incurred the debt.