Committee hears uniform consumer-debt default-judgments bill; sponsors, advocates and industry agree more work is needed

The Senate Law & Justice Committee on Feb. 13 opened a public hearing on Senate Bill 5720, the Uniform Consumer Debt Default Judgments Act, which would add notice and pleading requirements in consumer debt collection lawsuits. Sen. Peterson, the bill's sponsor, told the panel the measure is not ready to move this year and needs more stakeholder work.

The bill matters because default judgments in debt-collection suits are common and usually entered against unrepresented consumers, advocates and the Uniform Law Commission told the committee. Patrick Moore, staff counsel, said the bill would require complaints in consumer-debt cases to include itemizations of amounts sought and supporting documents and would, in some cases, require debt purchasers to state the chain of title for the account.

“Default judgments disproportionately affect our low-income clients,”…