Courts are required to ensure that unrepresented defendants can obtain a hearing in debt buyer cases if they so wish. The current practice of many courts urging unrepresented defendants to negotiate without supervision with creditors` lawyers contradicts this imperative. There is nothing wrong with the court promoting or facilitating dialogue between the parties to a civil dispute or encouraging efforts to resolve disputes amicably. But the current practice of many courts is to create some kind of challenge that defendants must run in order to get a hearing to which they are actually entitled under the law. [223] Given the profound inequality of arms between parties in most creditor actions, courts should ensure that all hearings encouraged or facilitated by the court are monitored and that defendants have access to independent legal advice or representation. [189] Robert J. Hobbs and Chi Chi Wu, Model Family Financial Protection Act, National Consumer Law Center, October 2013, (accessed October 26, 2015). The prevalence of these issues – and the extent to which they reflect fault, incompetence or genuine misunderstanding of the application of the relevant law – is hotly debated. [62] However, it cannot be seriously denied that the problems are real. In several cases, state and federal officials have forced major creditors to pay fines, overturn thousands of judgments that were flawed or poorly received, and/or agree to reform their collection practices. For example: At the national level, there is no empirical data to determine whether non-service by defendants is a major cause of high default rates in debt purchase cases. Some state court systems have begun to take proactive steps to ensure that defendants in debt buyback actions are properly served. [97] But many other tribunals rely solely on plaintiffs to ensure that an application is served on defendants and do little to ensure compliance.

This leaves them with no way to determine if poor service is a significant issue in the claims buyer cases they decide. When Human Rights Watch asked an Arizona justice of the peace if he believed that most of the defendants against whom he had rendered default judgments in debt purchase cases had been properly notified, he simply replied, “We don`t know.” [98] [34] FTC, “Repairing a Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration,” July 2010, (accessed October 9, 2015), p. i. [10] See Dalie Jiminez, “Dirty Debts Sold Dirt Cheap,” Harvard Journal on Legislation, Vol. 52 (2015), (accessed October 9, 2015), p. 15. 3: “The existence of this secondary market for consumer debt reduces the overall cost of credit and, according to some, is crucial to our credit industry.” Individual lawsuits by creditors tend to be for relatively small amounts, usually a few thousand dollars. [141] A practical consequence of this situation is that, in many States, creditors generally bring actions in small claims or similar lower-ranking courts.

These courts often have very flexible filing requirements and evidentiary rules. The relatively informal nature of these courts should both allow for more efficient adjudication on small claims and make the courts more accessible to ordinary people without lawyers. At the local level, creditors of many courts of first instance are one of the most important components of the entire civil case. [18] According to information provided to Human Rights Watch by courts in Maricopa County, Arizona (which includes the city of Phoenix), 5 major creditors filed more than 21,000 new lawsuits in these courts over a 12-month period beginning in July 2013. This accounted for more than 15% of all civil lawsuits. [19] Where no figures are available, anecdotal evidence paints a similar picture. A clerk in a busy Michigan district court described creditor attorneys filing new cases and wage garnishment petitions “after the box was loaded.” [20] New York State Chief Justice Jonathan Lippman told Human Rights Watch that in many states, “a factory of these cases is digging through the system.” [21] On a typical afternoon in Courtroom 5 of the Philadelphia City Court, more than 120 alleged debtors were summoned to court. The majority of them were sued by debt buyers. None of the approximately 20 defendants who appeared had a lawyer. When Human Rights Watch asked a lawyer in Pontiac, Michigan, if her office had ever lost a case in a debt buyer case, she replied, “I don`t remember.