Midland Funding, a large San Diego-based debt buyer, so far has filed 92 cases against Maryland consumers in January. That compares with 974 cases for all of January last year, and more than 2,950 cases in December, a month before the new rules kicked in, according to the Consumer Protection Clinic.

Equable Ascent Financial, a debt buyer from Illinois, has filed 42 cases this month. Last January, it filed 501 cases, the clinic reports.

George Durham, a spokesman for Midland, says the company has been reworking its processes in Maryland to make sure it complies with the new rules. He predicts that once the transition is complete, the number of lawsuits will return to previous levels.

Equable did not return calls for comment.

Maryland-based Pasadena Receivables says it has filed more than 300 cases so far this month, similar to the number filed this time a year ago.

Michael Lagana, vice president of acquisitions, says that the lawsuits overall might be down in Maryland because consumers have been paying off debt — and that there is less debt for Pasadena and others to buy.

When it appeared last year that new rules would be adopted, Lagana's company started to file lawsuits with more documentation and informed debt sellers that more information would be needed in the future, he says.

Lagana says he likes the new rules because they make the process uniform across jurisdictions. Before, one court might demand more information while another complained of too much paperwork, he says.

Now, he says, "everyone knows exactly what you need." And debt obligations will be clearer to consumers, too, he adds.

"If I can produce more information for the consumer … that works for everyone in the long run," Lagana says. "Most people would want to take care of it."

It may be months before it's clear whether the higher threshold of evidence has reduced lawsuits.

If the new rules work as intended, there will be fewer "junk lawsuits" forcing consumers into bankruptcy, says Peter Holland, a lawyer who runs the Consumer Protection Clinic at the University of Maryland.

"We were seeing the indigent, the working poor and middle class sued when they shouldn't have been," he says.

But Holland notes that as lawsuits dropped off this month, he started to hear more consumer complaints about harassing collection calls. Whether this trend will continue won't be known for months, he says.

Even with the new rules, consumers shouldn't assume that everything is in order and not bother to contest a lawsuit, lawyers say.

"Demand proof," Holland advises: proof that the debt buyer owns the debt and you owe it, that the claim is within the statute of limitations and of the amount owed.

A lawsuit is a serious matter, though, and you might need an attorney to handle the matter for you. Low-income consumers can get free legal help at Maryland Legal Aid at 866-635-2948 or get advice from the District Court Self Help Center at 410-260-1392.


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