The Wisconsin Consumer Debt Protection Taskforce was launched by the Commission in late 2024 to review and make recommendations for improving the fairness of the consumer debt collection process in Wisconsin.
Background
Debt collection cases dominate Wisconsin state court caseloads. In 2023, over 91,000 cases were filed in Wisconsin circuit courts as a “claim under a dollar limit” or “money judgment.” They made up 64% of the civil docket. Many cases were filed by third-party debt buyers—companies that purchase packages of consumer debt, typically for a fraction of the face value and then attempt to collect the full amount allegedly owed. Some of these debt buyers cannot show, and may not have, clear ownership of the debt or accurate information about the debt. Other contributors to this surge in consumer debt collection cases are related to medical debt, high interest lenders (e.g. payday and auto lenders), and some utilities. Studies in other states, including Michigan and Minnesota show that the courts are becoming a primary collection method.
Most of these cases are disposed of by default judgment against self-represented litigants, often issued without examination of the underlying procedural and substantive merits. Post-judgment, defendants may face significant harm in the form of garnished wages, seized assets, and reduced access to future credit, housing or employment. Wisconsin trial courts have no jurisdiction to reopen a default judgment after 12 months have passed from entry of judgment, leaving defendants without recourse even if the debt is illegitimate, fraudulent, or has been paid.
Maintaining public trust and confidence in the fairness of our judicial processes is a fundamental concern for the Wisconsin Access to Justice Commission. Given the apparent high default judgment rate in debt collection cases and impacts that this can have on individuals and the economic health of communities, it is worth learning more about the state of this issue in Wisconsin and examining solutions that could help ensure that any judgments are entered for the creditor or debt buyer who actually owns the debt, against the correct consumer who actually owes the debt, and for the correct amount.
Charge
The Wisconsin Access to Justice Commission Taskforce on Consumer Debt Collection will:
- Map and assess the impact on debtors, state courts and Wisconsin communities of current court rules, court processes in consumer related debt collection cases.
- Review and recommend improvements to Wisconsin’s debt collection laws, rules and processes.
- Establish working groups as needed to accomplish its charge.
Members
- Hon. Michael Zell, Chair, Wisconsin Access to Justice Commission (Chair)
- Molly Collins, Wisconsin Access to Justice Commission
- Hon. Rick Sankovitz, Wisconsin Access to Justice Commission
- Angel Kwaterski, Legal Action of Wisconsin
- Bobby Peterson, ABC for Health
- Cheryl Furstace Daniels, Retired
- Kristin Slonski, Wisconsin Judicare
- Erica Nelson, LIFT Wisconsin
- Joseph R. Johnson, Kohn Law Firm S.C.
- Matt Lynch, Wisconsin Department of Financial Institutions
- Mike Stueland, Connexus Credit Union
- Penny Carter, Forest County Clerk of Courts
- Riad El-Azem, Legal Aid Society of Milwaukee
- Sarah Orr, UW Law School Consumer Law Clinic
Advisors
- Casey Chiappetta & Lester Bird, Pew Charitable Trusts
- Jeff Reichman & David McClendon, January Advisors
- Jeff Brown, Wisconsin Access to Justice Commission
