Earlier this month, the Utah Bar Foundation, supported by The Pew Charitable Trusts released a report showing that debt collection cases are flooding Utah’s state courts. As reported by KUER90.1 on April 20, these cases “often pit individual defendants who owe small amounts of money against companies like high-interest lenders and credit unions.”
In 2019, for example, “just six plaintiffs accounted for approximately 50% of all district debt claims.” All were collection agencies, “which typically buy debt for a fraction of their original amount but sue consumers for the total cost plus collection fees.”
The Bar Foundation’s project researchers found the following:
- Some policies, including statutes and court rules, discourage defendant participation in debt lawsuits, in some cases leading to worse outcomes for defendants who do engage with the courts than for those who don’t.
- Civil courts are primarily used by financial institutions and their subsidiaries to collect debts. Consequently, individuals and/or small business owners represent a minority of plaintiffs.
- In Utah, six plaintiffs account for roughly 50% of all debt collection cases in District Court and nine plaintiffs account for roughly 50% of small claims filed in Justice Court.
- The size of debt being pursued in District Court is very similar to that pursued in Justice Court . . . , but outcomes for defendants are very different due to contrasting policies.
- While the rules for small claims in Justice Courts are easier to navigate for debtors, the rules for District Court were written assuming both parties involved in a case would have legal representation. Defendant confusion around their rights and obligations can discourage participation with a case. (Bolding & Italics added)
- When it comes to evictions, Utah’s policies are among the least renter-friendly in the nation; only two other states have a three-day “pay or vacate” window coupled with treble damages, which may be assessed in addition to any back rent owed, for residential evictions.
What can you do as a consumer to help your case should you find yourself in this predicament?
- Be aware of Consumer Statutes that exist to protect you, such as the Fair Debt Collection Practices Act.
- Contact a consumer rights attorney. I would suggest your LegalShield attorney.
- Save copies of all letters and notices from collection agencies.
- Save all phone messages and voice mails–this is very important!
- Make a note of your conversations with these bill collectors.
- Use a collection log to keep track of all communications with debt collectors.
Contact me at markhollandmbb@gmail.com for a complete copy of this report.
Yours in Prosperity,
Mark Holland