Small Claims Court Are Being Overwhelmed By Collection Lawsuits
I just attended a hearing in small claims court for two of my clients. I haven't been in small claims court for a couple of months. However, it appears that the number of small claims court filings are growing exponentially. I spoke with the attorney who is repesenting the creditors as local counsel, and he told me that he is working 7 days a week trying to keep up with the number of lawsuits coming into his office. He said that he has never seen anything like this. He predicted that the volume of lawsuits would continue through 2009. He based this upon the volumes of debt being purchased at substantial discounts. All of this debt will need to be collected in some way, shape or form.
It seemed that all of the debt collectors who we work with routinely were represented. It was shocking to see that the courtrom was filled with people and was standing room only. Equally shocking was the lack of people who weren't there. In other words, for every three cases called, only one defendant was there to answer the lawsuit. Unfortunately, this means that many people will receive a default judgment. A default means that they lose the case and can no longer challenge the merits of the case. I was there seeking to dismiss several lawsuits for failure to attach proper documentation to the complaint. It just makes me wonder how many judgments the debt colletors would receive with deficient lawsuits. It actually makes me sick to think about it.
