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New Consumer Credit Rules and Resources


Effective January 5, 2015, a Request for Judicial Intervention (RJI) is no longer required with a CPLR 3215(a) default judgment application filed in the
Supreme & County Courts by Administrative Order of the
Honorable A. Gail Prudenti dated December 23, 2014.

Overview and Applicability of New Rules

Additional Notice Requirement

Required Affidavits, Effective Dates and Fillable Forms:

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Overview and Applicability of New Rules

On April 30, 2014, Chief Judge Jonathan Lippman announced that, subject to a 30-day public comment period, the court system would adopt major reforms addressing default judgment applications in consumer credit cases, including those commenced by third-party debt buyers. The new rules and affidavits are intended to ensure a fair legal process and address documented abuses, including entry of default judgments despite insufficient or incorrect factual proof, expiration of the applicable statute of limitations and failed service of process.

Effective October 1, 2014, the new rules apply to default judgment applications in consumer credit collection cases where such applications are made to the clerk under CPLR 3215(a) in the Supreme Court, New York City Civil Court, City Courts outside New York City, and District Courts. The new default judgment rules apply to consumer credit transactions involving revolving or open-end credit extended by a financial institution to an individual primarily for personal, family or household purposes, with terms that include periodic payment provisions, late charges and interest accrual. This definition applies to credit card debt only. It does not apply to debt incurred in connection with, among others, medical services, student loans, auto loans or retail installment contracts.

The new rules require original creditor and debt buyer plaintiffs to submit specific affidavits that meet substantive legal and evidentiary standards for entry of a default judgment under New York law. In addition, plaintiffs must submit to the clerk an additional notice of a consumer credit action to be mailed by the clerk to the debtor at the address where process was served. The Administrative Orders promulgating the new consumer credit rules, as well as the applicable rules by court type, are as follows:

 

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Additional Notice Requirement

Effective October 1, 2014, at the time of filing proof of service of the summons and complaint, or at any time thereafter, the plaintiff must to submit to the clerk a stamped, unsealed envelope containing an Additional Notice of Consumer Credit Action addressed to the defendant at the address where process was served. The face of the envelope shall contain as a return address the appropriate court clerk’s office. The additional notice is to be mailed promptly by the court clerk to the defendant. No default judgment may be entered unless there has been compliance with this requirement and at least 20 days have elapsed from the date of mailing. No default judgment may be entered if the additional notice is returned to the court as undeliverable, unless the address at which process was served matches the defendant’s address on record with the New York State Department of Motor Vehicles. It is the plaintiff’s responsibility to obtain and submit any DMV records to the court clerk. It is the responsibility of the court clerk to ensure that the address on the DMV record matches the address where process was served.

Please note that the content of the additional notice for the New York City Civil Court differs from the additional notice applicable in other courts.

 

 

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Required Affidavits, Effective Dates and Fillable Forms

Pursuant to the new rules, the plaintiff must file the following papers as indicated below when seeking a CPLR 3215(a) default judgment in a consumer credit transaction for credit card debt. For your convenience, these required papers are provided as fillable PDF forms as follows:

Additional Notice of Consumer Credit Action — NYC Civil Court (all actions)

 Additional Notice of Consumer Credit Action — all other courts (all actions)
 (i.e., City Courts outside NYC, District Courts, and Supreme & County Courts)

  • Effective 10/1/14, required for ALL CPLR 3215(a) default judgment applications filed by Original Creditors and Debt Buyers irrespective of when the action was commenced or when the debt was purchased.
  • Informs the defendant that a consumer credit action has been filed against them by the plaintiff.
  • The Additional Notice must be submitted with an envelope:
    1. addressed to the defendant at the same address where the plaintiff served the summons and complaint upon defendant
    2. bearing the return address of the applicable Court Clerk’s Office
    3. with first-class postage affixed
  • NOTE: When using the fillable form, type the name and address of the court where the default judgment application was filed in the applicable fields. This name and address should match the return address on the envelope.

Affirmation of Non-Expiration of Statute of Limitations (all actions)

  • Effective 10/1/14, required for ALL CPLR 3215(a) default judgment applications filed by Original Creditors and Debt Buyers irrespective of when the action was commenced or when the debt was purchased.
  • Must be executed by plaintiff’s counsel affirming that the applicable statute of limitations has not expired.
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Affidavit of Facts by Original Creditor (Original Creditor actions only)

  • Effective 10/1/14, required for ALL CPLR 3215(a) default judgment applications filed by Original Creditors.
  • The plaintiff must attach the following exhibits:
    • Copy of credit agreement as defined in the new rules
    • If it is not contained in the credit agreement, other business records of the Original Creditor that set forth the following required information:
      • Name of the defendant
      • Last four digits of the account number
      • Date and amount of the last payment
      • Date and amount of charge-off balance
      • Amounts of any post-charge-off interest and post-charge-off fees and charges, less any post-charge-off credits or payments made by or on behalf the defendant
    • If seeking a judgment on Account Stated cause of action, must also complete paragraph 3 and attach a copy of final account statement
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Affidavit of Facts and Sale of Account by Original Creditor (Debt Buyer actions only)

  • Effective 10/1/14 through 6/30/15, required for CPLR 3215(a) default judgment applications filed by Debt Buyers if the debt was purchased from an Original Creditor on or after 10/1/2014.
  • Effective 7/1/15, required for ALL CPLR 3215(a) default judgment applications filed by Debt Buyers irrespective of when the debt was purchased from an Original Creditor.
  • Establishes that:
    • there was a contract between the Original Creditor and the defendant
    • there was a breach of the contract by the defendant
    • the Original Creditor sold the delinquent consumer credit account to a Debt Buyer
    • the status of the account at the time of sale
  • The following exhibits must be attached:
    • Copy of Bill of Sale or written Assignment of Account
    • Copy of credit agreement as defined in the new rules
    • If it is not contained in the credit agreement, other business records of the Original Creditor that set forth the following required information:
      • Name of the defendant
      • Last four digits of the account number
      • Date and amount of the last payment, if any
      • Date and amount of charge-off balance
      • Amounts of any post-charge-off interest and post-charge-off fees and charges, less any post-charge-off credits or payments made by or on behalf the defendant
      • Balance due at the time of sale
    • If seeking a judgment on Account Stated cause of action, must also complete paragraph 4 and attach a copy of final account statement
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Affidavit of Facts and Purchase of Account by Debt Buyer Plaintiff (Debt Buyer actions only)

  • Effective 10/1/14 through 6/30/15, required for CPLR 3215(a) default judgment applications filed by Debt Buyers if the debt was purchased from an Original Creditor on or after 10/1/2014.
  • Effective 7/1/15, required for ALL CPLR 3215(a) default judgment applications filed by Debt Buyers irrespective of when the debt was purchased from an Original Creditor.
  • Establishes that the Debt Buyer Plaintiff now owns the account, the chain of title of the account, and the current status of the account.
  • The plaintiff must attach the following exhibits:
    • Business records that set forth:
      • Name of the defendant
      • Last four digits of the account number
      • Amount of charge-off balance
      • Amounts of any post-charge-off interest and post-charge-off fees and charges, less any post-charge-off credits or payments made by or on behalf the defendant
      • Amount defendant currently owes on the account
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Affidavit of Purchase and Sale of Account by Debt Seller (Debt Buyer actions only)

  • Effective 10/1/14 through 6/30/15, required for CPLR 3215(a) default judgment applications filed by Debt Buyers if the debt was purchased from an Original Creditor on or after 10/1/2014.
  • Effective 7/1/15, required for ALL CPLR 3215(a) default judgment applications filed by Debt Buyers irrespective of when the debt was purchased from an Original Creditor.
  • Establishes the purchase of the account by one Debt Buyer and the subsequent sale of the account to another Debt Buyer as well as the status of the account at the time of sale.
  • The following exhibits must be attached:
    • Copy of Bill of Sale or written Assignment of Account
    • Business records that set forth:
      • Name of the defendant
      • Last four digits of the account number
      • Amount of charge-off balance
      • Amounts of any post-charge-off interest and post-charge-off fees and charges, less any post-charge-off credits or payments made by or on behalf the defendant
      • Balance due at the time of sale
    • A separate affidavit is required for each Debt Seller that owned the account before the plaintiff, as applicable
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Additional Note for Debt Buyer Actions

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