Bill Text: NJ AR187 | 2024-2025 | Regular Session | Introduced
Bill Title: Urges State Supreme Court to amend Court Rules to increase transparency in consumer debt litigation filings and procedures.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2025-05-05 - Introduced, Referred to Assembly Consumer Affairs Committee [AR187 Detail]
Download: New_Jersey-2024-AR187-Introduced.html
Sponsored by:
Assemblywoman LISA SWAIN
District 38 (Bergen)
SYNOPSIS
Urges State Supreme Court to amend Court Rules to increase transparency in consumer debt litigation filings and procedures.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution respectfully urging the State Supreme Court to amend the Rules of Court in furtherance of access to justice in consumer debt litigation.
Whereas, The provision of fair and equal access to justice is the fundamental mission of the Judiciary of this State; and
Whereas, However, consumer debt litigation presents a crisis for low-income individuals, where millions of economically struggling Americans are sued annually by creditors and debt buyers, and, in an overwhelming number of these collection lawsuits, debtors lack legal assistance and face enormous barriers to responding and defending against the suits; and
Whereas, As a result, courts may at times enter default judgments against individual debtors without fully assessing the legitimacy, merits, or accuracy of the claims, subjecting the individuals to sometimes erroneous seizure of money and assets, burdensome post-judgment hearings, crippling fees and interest, onerous payment plans, and other destabilizing collection efforts, all of which perpetuate and deepen cycles of debt that keep millions of Americans struggling to meet their most basic needs; and
Whereas, In 2024, the National Center for Access to Justice (NCAJ) at Fordham University School of Law conducted a nationwide survey concerning the laws and procedures governing consumer debt collection lawsuits; and
Whereas, The NCAJ's findings were compiled in a report entitled "The Consumer Debt Litigation Index," which measured states based on 24 Benchmarks covering a range of issues including, but not limited to, service of process, statutes of limitations, proofs of debt, court filing fees, forms of pleading, default judgments, judgment interest, wage garnishments, right to counsel, and statistical data collection; and
Whereas, The Consumer Debt Litigation Index makes a number of recommendations directed to the Legislature and Judiciary of this State that would reform the unequal balance of power between individual debtors without lawyers and corporate creditors represented by sophisticated counsel; and
Whereas, The implementation of several of these recommendations would require amendments to Part IV and Part VI of the Rules of Court, which are under the exclusive authority of the State Supreme Court; and
Whereas, In particular, the Rules of Court could be improved in the interest of justice by implementing the findings and recommendations for Benchmark 6 of the Consumer Debt Litigation Index, which concern reforms to a creditor's pleading requirements to require the name of the original creditor, the chain of assignment when a debt has been assigned to another creditor or debt buyer, and an itemization of the debt principal, interest, fees, costs, and other charges, to inform the debtor of the nature and legitimacy of the debt; and
Whereas, The Rules of Court could be improved in the interest of justice by implementing the findings and recommendations for Benchmark 7 of the Consumer Debt Litigation Index, which concern reforms to a creditor's use of authenticated business records to prove the existence and validity of a debt, and reforms to service of process prior to granting a default judgment, to require proof of service of all court filings by the creditor including requests for the entry of defaults and motions for default judgments, authenticated copies of the original credit agreement and account statements, and a sum certain calculation of the judgment amount sought with an itemization of the debt principal, interest, fees, costs, and other charges, so that the court may be satisfied that the creditor has met its burden of proof; and
Whereas, The Rules of Court could be improved in the interest of justice by implementing the findings and recommendations for Benchmark 8 of the Consumer Debt Litigation Index, which concern reforms to a creditor's pleading requirements to show proof that a collection lawsuit has been timely filed within the applicable statute of limitations based on the date that the claim accrued, so that the court may be satisfied that the creditor actually has a valid claim which can still be litigated; and
Whereas, The Rules of Court could be improved in the interest of justice by implementing the findings and recommendations for Benchmark 22 of the Consumer Debt Litigation Index, which concern reforms to the practice of post-judgment debtor examinations and the conduct of depositions, to limit the frequency of such examinations in order to minimize the abuse of this practice as a means to harass the debtor; and
Whereas, The State Supreme Court, through its Civil Practice Committee and Special Civil Part Practice Committee, has continuously sought to improve access to justice by examining the Rules of Court and adopting recommended reforms as appropriate; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. The State Supreme Court is respectfully urged to study the findings of the Consumer Debt Litigation Index report concerning this State, and to make all appropriate amendments to the Rules of Court in accordance with the report's findings.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Chief Justice of the State Supreme Court, each Associate Justice of the State Supreme Court, and to the Attorney General of the State of New Jersey.
STATEMENT
This resolution urges the State Supreme Court to study the findings and recommendations applicable to this State from the Consumer Debt Litigation Index report, issued in March 2024 by the National Center for Access to Justice (NCAJ) at Fordham University School of Law.
The findings of the NCAJ report show that this State ranks 12th in the nation when it comes to access to justice and procedural fairness for individuals facing consumer debt collection lawsuits. The NCAJ report highlighted several areas for reform concerning creditors' pleading requirements, proofs of debt and assignments of debt, service of process, default judgments, compliance with the applicable statutes of limitations, and post-judgment depositions. However, implementation of these reforms would require amendments to the Rules of Court, which may only be amended by the State Supreme Court. Therefore, the State Supreme Court is respectfully urged to study the NCAJ report and specifically implement the findings and recommendations of Benchmarks 6, 7, 8, and 22.
