US courts clogged with debt recovery litigation

Processes for recovery of consumer debt are in need of urgent reform according to critics who point to the flood of lawsuits clogging US courts. The Federal Trade Commission has proposed that states require collectors to provide more detailed information to the courts, and to take steps to ensure that consumers are present at court proceedings for debt recovery. The litigation boom has occurred as a result of two primary factors; first, of the rise of debt buyers – firms who buy bad debts from credit companies and often use the courts to try to recover the sums owed. Secondly, law firms are now using software to enable them to handle far greater volumes of cases. Cohen & Slamowitz in New York State, for example, has just 14 lawyers on staff and has been filing around 80,000 lawsuits a year.

US courts clogged with debt recovery litigation Wed, Jul 14, 2010