Assembly to vote on changing requirements for debt-collection lawsuits

Listen to this article

The state Assembly is taking up a a bill that would change the pleading requirements that apply in certain debt-collection cases.

The Wisconsin Consumer Act places various requirements on the types of complaints a creditor or merchant must file in order to collect debt from consumer-credit transactions amounting to less than $25,000.

AB 117 would modify the pleading requirements for a merchant. In particular, it would require that a complaint include,  in the case of a closed-end billing plan, a billing statement sent to a customer. For a lawsuit over an open-ended repayment plan, a merchant would have to provide the amount owed after a customer’s default and  a breakdown of all charges, interest and payments.

The bill would also stipulate that billing statements fulfill a merchant’s requirement to provide copies of evidence of a customer’s obligation under the Wisconsin Consumer Act, and that the statements may be attached to a complaint to complete that requirement.

Under the bill, a court cannot enter default judgement on a complaint that doesn’t comply with the new pleading requirements,

The proposal also provides that failure to comply with the requirements does not violate the Wisconsin Consumer Act and does not allow recovery of attorney’s fees unless a customer shows by a preponderance of evidence that a failure to pay debt was willful or intentional.

The Assembly is scheduled to vote on the proposal on Tuesday.