April 21, 2005 - The Massachusetts Legislature is now considering a bill which would increase the Small Claims filing limit from $2,000.00 to $5,000.00. Currently 26 states have Small Claims limits of $5,000 or more while only one (Kentucky) has a maximum Small Claims filing limit lower than that of Massachusetts. In years past similar legislation has been proposed and has received the House's initial approval but has not made it beyond the Committee on the Third Reading. This year, according to numerous legislators with whom LGW has discussed the proposed legislation, the chances for passage of the bill to increase the Small Claims filing limit have greatly increased, as it is the intent of the proponents of the legislation to include the bill as part of the State's budget process, due to be completed in early July.
What would the Small Claims filing limit increase mean to you? Should the proposed legislation pass, the cost of filing a collection law suit in Massachusetts will decrease significantly. As you may know, the Massachusetts Small Claims filing fee, currently $40.00, includes the cost of filing the Small Claims action as well as service of the Small Claims hearing notice and the cost of the initial post-judgment debtor examination hearing. Currently, it can cost a creditor in excess of $350.00 to get to that point in the collection process under the present scheme for claims with a balance of greater than $2,000.00. Realizing a potential savings of $310.00 per claim will make a huge difference in the expense of litigating suit-worthy accounts in Massachusetts and will greatly increase the creditor's net-back.
Updates on the progress of this legislation will be provided as information becomes available. LGW is committed to keeping its clients and friends informed concerning important developments which impact your business.
For the firm - Kenneth C. Wilson, Esq. |
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