A recent blog post discussed recent regulations enacted by New York
State, which impose
pre-lawsuit requirements on debt collectors. Those regulations require initial disclosures that recite exempt sources of income. They also require collectors to inform consumers of additional verification procedures, and require debt collectors to promptly memorialize settlement agreements.
But post-lawsuit, when default judgments are about to be entered, or have been entered, New York consumers should be aware of additional affidavit (and proof) requirements before creditors and debt buyers may enter default judgments.
The below court rules have been enacted throughout the state of New York with slight variations between court regions. Upon close reading, these rules are a game changer and will undoubtedly change the business-as-usual business model of debt buyers suing in New York. Like I said in an earlier blog, citing particular information in debt-buyers' assignment documents is their Achilles heel. We excitedly await the impact of these new rules on more recently obtained default judgments.
In a nutshell, with regard to consumer-credit transactions (credit cards for personal uses), effective October 1, 2014, creditors and debt buyers must supply the following documents to the court clerk when seeking default judgments under CPLR § 3215.
- "Affidavit of Facts and Purchase by Original Creditor"
Debt Buyers (purchasers of charged-off debt):
- "Affidavit of Facts and Purchase of Account by Debt Buyer Plaintiff" (from all debt buyers involved); and
- "Affidavit of Facts and Sale of Account by Original Creditor"
Both entities must supply an "Affirmation of Non-expiration of Statute of Limitations" executed by the attorney.
In addition, and perhaps the most notable, the affidavits shall be supported by exhibits, including:
- Copy of the credit agreement;
- Bill of Sale or written assignment, and relevant business records that set forth the name of the defendant;
- The last four digits of the account number;
- The date and amount of the chargeoff balance;
- The date and amount of the last payment;
- The amounts of any post charge-off fees and charges less any post-chargeoff credits or payments made by or on behalf the defendant;
- The balance due at the time of sale.
These rules actually require the clerk to refuse the default papers that fail to meet these requirements.
In addition to discerning the applicability of these rules to your case, I implore you to scrutinize the papers on the "sum certain" issue discussed in this blog.