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