In 2011, Indiana saw many new laws enacted. Certain Indiana Trial Rules and Indiana Small Claims Rules were also amended. In 2011, the Indiana Supreme Court amended Indiana Trial Rule 9.2 and Indiana Small Claims Rule 2 to require creditors to file an Affidavit of Debt along with the Notice of Claim if the amount disputed is based on an account.
What is an “account?”
An “account” has been broadly defined as “all types of accounts and is not limited to written accounts.” Some examples provided by the Indiana Supreme Court include: credit cards, utility bills, medical bills, a judgment issued by a court, etc. However, Indiana courts have increasingly required plaintiffs to file the Affidavit of Debt regardless of the type of debt, including cases in which an account was not at issue.
What is included in an Affidavit of Debt?
A form Affidavit of Debt can now be found in Appendix A-2 in the Indiana Trial Rules and Appendix A in the Indiana Small Claims Rules. The form is the same for both small claims cases and plenary cases. The content of the form contains details about the debt, such as:
- If the debt was obtained from a third party and who the third party is;
- The original debt owner of the account;
- The unpaid balance;
- When the account was opened;
- The amount of the last payment and when it was made;
- The type of account;
- Late fees, if any;
- Interest, if any;
- Attorneys’ fees, if being claimed.
Also included in the Affidavit of Debt are a statement that the defendant is not a minor or incompetent, and information regarding the defendant’s military status.
What does this mean for property managers and real estate investors?
Most of the disputes that property managers and real estate investors take to Small Claims Court are contract driven (e.g., breach of lease or property management agreement), and not account driven. However, as mentioned above, recent Small Claims Courts’ interpretation of this new rule is erring on the side of making parties submit the Affidavit of Debt, regardless of the basis for the dispute. It is always a prudent business practice to check with your attorney before going to court. Although Small Claims Courts were established to be more informal than superior and circuit courts and are easily accessible for the lay person, failing to comply with a Trial Rule could be harmful to your case.