But that changed this month.
Consumer lawyers and debt buyers say it's too early to know whether these new filing requirements will permanently reduce collection lawsuits that have inundated the courts in recent years. But both sides agree that the process will now be more transparent to consumers. And that's a big improvement since many consumers didn't respond to lawsuits — and subsequently lost — because they didn't recognize the debt.
Now when debt buyers file a lawsuit, they basically have a checklist of documents that they must attach to the complaint.
For example, they must provide proof of the debt, such as a document signed by the consumer when opening the credit card or a statement showing the consumer used the account. Debt buyers also must submit evidence that they own the debt, including a list of all the previous owners and paperwork on the sale of the debt. And they must give an itemized accounting of the amount owed, such as principal, interest and late fees.
Debt buyers pay pennies on the dollar for debt that the original creditor or another debt buyer has given up on trying to collect. Sometimes a debt is sold again and again with little accompanying documentation.
"They would buy computer printouts with names and account numbers, and basically sue en masse," says Chief Judge Ben C. Clyburn of Maryland's District Court, who was involved in creating the new rules.
Fifteen debt buyers alone filed 32,553 cases against Marylanders last year, according to a survey by the Consumer Protection Clinic at the University of Maryland law school. The year before, they filed 39,526 cases.
Most of the time, consumers don't show up in court. They lose by default, and their wages are garnished.
Sonya Smith-Valentine, a lawyer in Largo, says consumers sometimes haven't responded because they didn't recognize the debt, which might have been sold over and over again.
"They don't recognize the name of the company. 'I didn't do anything with ABC. Who are they?'" she says. Consumers read about scams, she says, and suspect the debt buyer is pulling one.
Many consumers, unwilling to hire a lawyer to contest a $500 or $2,000 claim, don't have legal advice. "The lawyer fee would be more than the debt," Clyburn says.
Debt buyers "started cutting all these corners," the judge says. "They knew the average consumer wouldn't respond."
And, Clyburn says, they took advantage of the fact that judges confronted with thousands of cases didn't look closely at them.
Consumer advocates complained that debt buyers tried to collect on debt that had been discharged in bankruptcy, was owed by someone else or fell outside the statute of limitations for pursuing in court.
A rules committee appointed by the Court of Appeals of Maryland issued a report last summer that found that "the plaintiff often has insufficient reliable documentation regarding the debt or the debtor and, had the debtor challenged the action, he or she would have prevailed."
The guidelines were approved last fall. Clyburn says only a few states, including North Carolina, have been ahead of Maryland in raising the bar on debt-buyer lawsuits.
Looking at a court database, it appears that the number of lawsuits has dropped, although lawyers and others note that there's a lag in postings.
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.