Appleseed volunteers researched and wrote a white paper about the abuse of the judicial system by debt buyers. The white paper also included proposed solutions to the problem. An article about the issue appeared in the February/March edition of the Louisiana Bar Journal. Volunteers also have appeared on radio shows to discuss this issue.
Legal Partners:
Barrasso Usdin
Amy Duncan
Sam Ford
Chelsea E. Gaudin
Community Partners:
Louisiana Civil Justice Center
Louisiana State Bar Association
Southeast Louisiana Legal Services
In 2012, the Louisiana State Bar Association’s Gap Assessment Subcommittee identified “Debt Buyer” cases as an area in need of additional resources. Debt buying occurs when a company purchases debts from a creditor, such as a credit card company, for a fraction of the face value of the debt. It is common for certain creditors, particularly credit card issuers, to sell defaulted accounts on which they have been unable to collect. Debt buyers, as opposed to original creditors, file lawsuits by the thousands. They rely on the fact that many people they sue will not respond or dispute the case. Debt buying firms often do not have adequate proof that they own an individual’s debt, and cannot obtain such proof from the original creditor to satisfy a court. LSBA and SLLS Northshore have already partnered to create a pilot project to develop a training program for pro bono attorneys interested in assisting with cases that prey on unsophisticated debtors, including those that bring suits without proper service, insufficient evidence, or against debtors who have already paid or otherwise discharged their debt. Volunteer attorneys will receive training, forms and pleadings, and mentoring to help them defend what are often highly winnable cases for those in need. At the request of the LSBA, Louisiana Appleseed has joined its working group to identify and address some of the systemic issues that arise as a result of these debt buyer cases. As a scoping project, we had a Loyola Law intern who drafted a comprehensive white paper, studying Louisiana’s current laws and best practices in other states and offering workable solutions in this arena.