Massachusetts Strengthens Rules For Small Claims Collection Lawsuits

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Written by Jonathan Summers

Thursday, 11 March 2010 08:51

by JonathanSummers

The Massachusetts Supreme Judicial Court released last week that it has altered some of the rules governing the use of small claims courts. The Court said that the changes were created specifically to address the number of debt collection cases that are filed in small claims courts.

The rule changes come on the suggestion of the Small Claims Working Group, a panel of legal experts that was convened in 2006 to analyze and improve current small claims practices. In a press release describing 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 affairs labeled by the Working Group in collection cases, and four in particular: increased genuineness of service, incompletely detailed claims, increased analysis 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., acknowledges that some collection law firms will be affected. This will impact 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 make use of small claims courts. If the plaintiff fails to confirm the address, the court may not enter a default judgment if the defendant later fails to appear for trial.

The changes also add elevated scrutiny to default judgments that are entered. New small claims laws require plaintiffs to inform 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 examine the terms of any agreement for judgment with the parties if they are present in court. This insures that the court does not order or otherwise endorse any private payment agreement that relies on exempt sources of income. This avoids any prejudiced 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.

About the Author:

Mallory Megan works for a collections agency that works with a debt collection lawyer. She also does pieces on business and finance, consumer spending and collections agencies.