Bob Markoff quoted in Chicago Law Bulletin

Bill to crack down on debt buyer fraud generates some criticism

Bethany Krajelis, Chicago Law Bulletin. Vol. 156 Issue 29. February 11, 2010

SPRINGFIELD — Debt buyers would have to disclose more information in lawsuits that are based on assigned claims under a measure being pushed by the Chicago Bar Association. Sponsored by Rep. Michael J. Zalewski, D-Chicago, House Bill 4931 was drafted as an attempt to ensure that debt buyers have properly obtained the debts they are suing to recover and that defendants in these lawsuits understand who is suing them and why.

Zalewski and Daniel A. Edelman, an attorney with Edelman, Combs, Latturner & Goodwin LLC in Chicago, told members of the House Judiciary I – Civil Law Committee on Wednesday that the measure would help combat fraud and other issues that commonly arise in debt lawsuits. “There is a major problem in Illinois with debt buyers … filing lawsuits against people without being able to show they have a title to the debts,” Edelman said, explaining that whether it’s by accident or fraud, there have been documented instances in which the same debt has been claimed by more than one person or company. Edelman said the measure would solve this problem by requiring the debt assignee — those who buy debt from another entity— to disclose the “chain of title” in the complaint. This, he said, would provide the defendant with information that could help him or her figure out who is suing, as defendants often disregard notice of such lawsuits after not recognizing the party suing them. The bill would also require the plaintiff to attach a notice to the complaint, recommending that the defendant seek legal advice as the debt assignment process can be complicated.

Voicing opposition to HB 4931, Chicago attorney Robert G. Markoff testified on behalf of the Illinois Creditors Bar Association at Wednesday’s hearing. Markoff, a collections attorney with Markoff & Krasny, told the committee that the CBA-backed bill “will not solve the problems raised by Mr. Edelman.” Calling the bill one-sided and unfair, Markoff said the proposal’s provision that would require debt buyers to disclose the chain of title would produce more paper than anything else. Arguing that there is not enough room on the shelves of the state’s courthouses to maintain all the paperwork HB 4931 would produce, Markoff said it doesn’t make sense to require this disclosure on debts when people don’t always always ask for a chain of title before buying cars, homes and other products. Markoff also told the committee that if they “follow the money,” they would see how much money debt buyers bring to the state’s counties through filing fees. “In Cook County alone, take 100,000 cases at an average cost of $200 for filing fees, that’s $20 million,” Markoff said. “In Cook County, the fees generated pay for the entire court system, including adult probation.” Markoff, who was joined by a handful of others in his opposition, said the bill would complicate what is supposed to be a simple process for small claims. “While the intentions are to aid consumers … it throws out the baby with the bath water,” Markoff said. “It’s overly burdensome.” Saying that he understood his bill needed “significant work,” Zalewski told the committee he would talk with his opponents and try to bring something back soon for the committee to vote on. And in an apparent swing at the recent Illinois Supreme Court decision on medical malpractice caps, Rep. Sidney H. Mathias, R-Buffalo Grove, pointed to one sentence of the proposal that says the contents of the notice recommending that defendants should seek legal advice “shall be established by Supreme Court Rule.”

“I was just wondering if you can require the Supreme Court to do anything, I would like to find out how you do it and maybe we can require them to reverse some of their recent decisions,” Mathias said to a mix of laughs and shaking heads.

Also on Wednesday, the House committee passed House Bill 4684, which would exempt foster parents from paying child support on the stipend they receive from the state. The measure would amend the Illinois Marriage and Dissolution of Marriage Act to include payments from Department of Child and Family Services on a list of exempted income in child support considerations.

In a 14-1 vote, the committee sent the bill, sponsored by Rep. Naomi D. Jakobsson, D-Urbana, to the House floor. Rep. Careen M. Gordon, D-Coal City, voted against the measure.

— Allison Petty contributed.

Font Resize