Washington Lawyer - November/December 2022 - 16

FEATURE
subsection (v), from seeking attorney's fees in a debt collection lawsuit
- unless a contract or other document provides for it. Even if it does,
those fees generally cannot exceed 15 percent of the amount of the
debt.
Under subsection (n), when agreeing to resolve a debt, consumers
cannot be required to make a payment to a debt collector until they are
first provided with a written copy of the settlement terms. That writing
must include a warning that the consumer might have protected funds
or resources that cannot be taken by a debt collector and notice that the
consumer may want to seek legal advice before agreeing to pay or settle.
Also, once the statute of limitations has expired, subsection (l) provides
that a consumer's payment or acknowledgement of the debt will not
extend the limitations period, which cannot exceed three years.
REFORMS
IN JUDICIAL
PROCESS
Because of the high
volume of debt collection
cases filed in
D.C. Superior Court,
the court has long
maintained special
debt collection calendars
- one for small
claims cases seeking
$10,000 or less and
another for civil
action cases seeking
more than $10,000.
Most cases on those
calendars are for the
collection of what
the new law defines
as a " consumer debt, "
and almost all the
consumer defendants
in these cases are unrepresented unless they find their way to a free legal
services lawyer after the case is filed.
In 2019 (the last year of normal court operations before the pandemic),
more than 7,200 debt collection cases were filed. The small claims
calendar alone had 6,422 debt collection and subrogation cases. It is
worth noting that debt buyers filed 54.5 percent of the total collection
cases in 2019, and approximately one-third of filed cases resulted in
a default judgment.
The new debt collection law will ensure that defendants in these cases
have meaningful information about the debt they are being sued for and
that the plaintiffs establish that they are entitled to judgment, even in
cases where the judgment is entered by default.
The key reforms address service of process, initial filing requirements,
and the requirements for obtaining a judgment. To enforce these revisions,
subsection (t) provides that the court must " on its own, prior to
entering judgment, review whether the plaintiff has complied with the
requirements of [all subsections regulating the judicial process]. " If there
16 WASHINGTON LAWYER * NOVEMBER/DECEMBER 2022
has been " substantial or willful noncompliance, " the court must dismiss
the case with prejudice. Otherwise, the consumer can assert the violation
as a defense.
Service of Process. Under subsection (p), immediately before filing a
legal action, a debt collector must " undertake a reasonable investigation
to verify the defendant's current address for service of process. "
Currently, many debt collectors rely on old addresses and claim proper
service even when the court papers are left with someone at the
previous address.
The District's new debt collection law
comes at a pivotal time for D.C. residents
dealing with the lasting financial impact
of the pandemic and an uneven economic
recovery.
legal services providers.
Requirements for Obtaining a Judgment. Subsections (r) and (s) state
evidentiary requirements for judgment - whether based on summary
judgment, judgment on the pleadings, after trial, or by default. The
former subsection applies to all consumer debt cases, while the latter
states additional requirements applicable to debt buyers.
Subsection (r). Before obtaining a judgment, the plaintiff must file
evidence " to establish the amount and nature of the consumer debt. "
The evidence must be based on " business records, authenticated by an
affiant or affiants with knowledge of how the records were created and
kept by the original creditor and any subsequent debt buyer. " That
evidence must include the information identified in subsection (m)(1).
Subsection (s). In addition to the subsection (r) requirements, debt
buyers must file " an account-specific affidavit by the original creditor
setting forth the facts establishing the existence of the debt and the
amount due at the time of sale or assignment. " A similar affidavit must
be filed by each debt seller in the chain of title. The debt buyer must file
Initial Filing Requirements. Subsection (q) provides that the plaintiff
must attach to the complaint or statement of claim " the signed contract,
signed application, or other documents that provide evidence of the
consumer's liability and the terms thereof " and must state (1) the type
of consumer debt,
(2) the substantiation
information identified
in subsection
(m)(1), (3) the basis
for any interest and
fees, (4) the basis for
any request for attorney's
fees, (5) the
current owner of the
debt and the names
of all prior owners
and dates of transfer
of ownership, (6)
affirmation that the
action is filed within
the statute of limitations
period, and
(7) notification that
the consumer might
have protected income
or resources,
together with the
current phone
numbers for civil
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Washington Lawyer - November/December 2022

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