Today’s Boston Globe installment (the second of a four part series) focuses on the Massachusetts Court system.
[The small claims session] is a de facto arm of a fast-growing and aggressive industry that has swamped court dockets with lawsuits – cases that often lead to threats of jail for debtors.
* * *
A Globe review of proceedings and records in 20 of the state’s 70 small-claims courts found that court officials and collection lawyers routinely break court rules, almost always to the detriment of the defendant. Collectors are almost never asked to prove the debts they claim; defendants are rarely informed of their rights. And debtors, usually too strapped to afford a lawyer, must contend with this legal mismatch alone.
Related posts:
Bill, I practice bankruptcy law in Atlanta and I frequently see situations where a debtor has a magistrate court (small claims) for a debt that may be either stale or bogus. What is the debtor/defendant’s remedy:
1) at the time the bogus lawsuit is filed
2) after judgment
3) can a debtor raise a FDCPA or FCRA claim w/in a bankruptcy case?
Bill Responds:
I have filed FDCPA claims as a counterclaim in state court actions. The problem arises (and this Globe article touches upon the problem) when the debtor/defendant has not been properly served. Once the judgment has entered, it can be difficult to get a judgment set aside – since in Massachusetts the decision to set aside largely rests on the discretion of the judge. This can be particularly problematic when you have collection law firms who use a method of “sewar service”, which I wrote about in an April 19, 2006 post.
A Fair Debt Collection Practices Act claim can be raised in a bankruptcy. For example, if the creditor filed a proof of claim for a stale or “re-aged” debt, it would be appropriate to assert a FDCPA claim when attacking the proof of claim. Some courts have held however, that the FDCPA cannot be used in bankruptcy proceedings.
If the debtor is aware of a potential FDCPA and/or FCRA claim prior to filing the petition, it is important to list that fact on Schedule B. Failure to list the claim, will result in those rights being lost.