Affidavit of Debt in Every Case Based on Account and Waiver of Excess Claims in Certain Instances
Effective January 1, 2011, the Indiana Supreme Court amended Trial Rule 9.2 and Small Claims Rule 2 to requiring parties to file an Affidavit of Debt if the case is based on an account. Under Trial Rule 9.2(A) and Small Claim Rule 2(B), a party must include an Affidavit of Debt when filing a pleading founded on an account. An “account” includes all types of accounts and is not limited to written accounts.
A form affidavit, found in Appendix A-2 in the Trial Rules and Appendix A in the Small Claims Rules, is the same for both plenary and small claims cases. The Affidavit of Debt must include details about the debt, such as:
- if the debt was obtained from someone else and who that person is;
- who is the original debt owner of account;
- how much is the unpaid balance;
- when was the account opened;
- how much was the last payment and when was it made;
- what type of an account is it (credit card, utility, medical bill, a judgment issued by a court, or any other account which must be explained);
- are late fees being claimed and how much are they;
- is interest being claimed and how much is it;
- whether or not plaintiff is seeking attorney fees, etc.
The Affidavit of Debt also contains affirmations that the defendant is not a minor or incompetent and, as required under Trial Rule 55 and Small Claim Rule 10, information about the defendant’s military status. Under federal law, a default judgment against a service member who has not appeared in a case can be obtained only if the defendant is not on active military service or the plaintiff is unable to determine the military status of the defendant.
The Affidavit of Debt must be filed in addition to the contract or other written instrument upon which the claim is based. Trial Rule 9.2(A) and Small Claim Rule 2(B)(4)(a) require that a pleading founded on a written instrument must be accompanied by an original or a copy of the written instrument. If the pleading is not based on an account, but just based on a written instrument, then an original or copy of the written instrument is required, but an Affidavit of Debt is not. Failure to file an Affidavit of Debt is not fatal to an action. The trial court judge has discretion to order compliance with the rule, require that a statement of reasons for non-compliance be added to the pleadings, or allow the action to continue without further pleading.
Indiana Small Claims Rule 8 allows non-natural persons (sole proprietorships, corporations and partnerships) to be represented in court by non-lawyers in certain small claims cases of $1,500 or under. These lay representatives must be full-time employees of the business, and the business must file a certificate with the court accepting responsibility and liability for the acts of the representative.
The Affidavit of Debt may be completed by the plaintiff, or in small claims cases of $1,500 or less, by the designated full-time employee of the plaintiff. The Affidavit of Debt is made under oath, so that the affiant must be familiar with the record keeping practices of the plaintiff and make his/her representation according to documents kept in the normal course of plaintiff’s business or upon the affiant’s personal knowledge.
It’s also important to keep in mind that Small Claims Rule 8 (C) provides that any assigned or purchased claim, or any debt acquired from the real party in interest by a third party, cannot be presented or defended by said third party unless this third party is represented by counsel. This means that collection agencies or other entities that have cases based on assigned accounts must be represented by attorneys. Also, any claims exceeding one thousand five hundred dollars ($1,500.00) must be defended or presented by counsel.
Another amendment to Small Claims Rule 8(4)(b) provides that a corporation or partnership that uses a full-time employee to present or defend its case waives any present or future claim in this or any other forum in excess of $1,500.
These amendments are intended to encourage plaintiffs to verify claims before instituting litigation, to allow defendants to identify the nature of the debt being asserted against them and may have been sold and resold without their knowledge, and to comply with federal statutes concerning default judgments against those engaged in military service.