Effective July 1, 2011, a plaintiff filing a consumer loan or credit card collection action in the Court of Common Pleas in the State of Delaware must comply with new pleading and documentation requirements under an Administrative Directive issued by the Court’s Chief Judge.
Several states have recently enacted or proposed more stringent requirements for collection actions. However, the Delaware Directive, which will be particularly burdensome for debt buyers, appears to be the first judicial initiative targeting debt collection outside of the mortgage foreclosure arena.
The Directive, issued on March 16, 2011, includes the following new requirements:
The complaint must plead (a) the name of the original creditor and the last four digits of the original account number, (b) the name of the debt’s current owner, (c) the full chain of assignment if the plaintiff is not the original creditor, and (d) the amount claimed, broken down by principal due at the time of default, interest, fees, and other charges.
The following documents must be attached to the complaint: (a) a copy of the original contract or other documentary evidence of the original debt, and (b) a copy of the assignment or other documentary evidence establishing that the plaintiff owns the debt. If the debt was previously assigned, each assignment or other document evidencing a prior assignment must be attached so as to establish an unbroken chain of ownership. Each such document must show at least the last four digits of the original account number and the debtor’s name.
The Court may, on a motion or sua sponte, deny the entry of judgment or withdraw an entered judgment in favor of a plaintiff that fails to comply with the Directive.
For more information about recently enacted or proposed state debt collection requirements, see our prior legal alerts reporting on New Mexico’s new requirements for time-barred debts and proposed debt collection regulations and legislation in, respectively, Massachusetts and Florida .
Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). In addition to having vast experience in defending all manner of debt collection lawsuits, Ballard Spahr lawyers regularly counsel their clients engaged in consumer debt collection on compliance with the Fair Debt Collection Practices Act and state debt collection laws. For more information, please contact Group Chair Alan S. Kaplinsky , 215.864.8544 or firstname.lastname@example.org ; Vice Chair Jeremy T. Rosenblum , 215.864.8505 or email@example.com ; John L. Culhane, Jr. , 215.864.8535 or firstname.lastname@example.org ; Martin C. Bryce, Jr. , 215.864.8238 or email@example.com ; Mercedes K. Tunstall , 202.661.2221 or firstname.lastname@example.org ; Keith R. Fisher , 202.661.2284 or email@example.com ; Barbara S. Mishkin , 215.864.8528 or firstname.lastname@example.org ; or Mark J. Furletti , 215.864.8138 or email@example.com
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