Philadelphia Establishes New Consumer Credit Card Collection Diversion Program

The Philadelphia County Court of Common Pleas recently began a Consumer Credit Card Diversion Pilot Program to fast-track consumer credit card debt collection actions that have occupied one-third of the court's civil arbitration docket in the last five years. The pilot aims to reduce the resolution time of these actions from more than a year to a few months by requiring debt collection plaintiffs to gather and attach evidence of debts before filing actions and mandating that the parties meet for an early debt conciliation conference before mandatory arbitration.

The problem stems from the "batch-filing" of hundreds of credit card debt collection actions that are not adequately pursued by plaintiffs. Prior to the pilot program, these cases were assigned a mandatory arbitration date nine months out from filing (required in the Philadelphia County Court of Common Pleas for civil actions with an amount in controversy of $50,000 or less). Plaintiffs frequently failed to locate and serve defendants with complaints before the commencement of these arbitration hearings. Because no arbitration can proceed before the defendant is served, the cases are further delayed, often lingering on the court's docket for more than a year before any hearing or resolution on the merits.

Judge Joshua Roberts, who serves on the Philadelphia County Court of Common Pleas and administers the program, met with attorneys from Holland & Knight's Financial Services Team to discuss the rationale behind its implementation. Judge Roberts explained that there are only so many arbitration dates that can be assigned each day, resulting in a glut of debt collection actions that overwhelm the court's docket. These filings create a ripple effect that delays hearings for cases that may benefit from the court's arbitration program. Additionally, debt collection cases that could be resolved quicker end up being drawn out over a longer period of time. The program is designed to ensure that all parties are ready to proceed at the outset of the matter, thereby reducing delays and leading to less stress on the court's time and resources.

Program Overview

The Consumer Credit Card Diversion Pilot Program, codified in General Court Regulation No. 2026-01 and effective June 1, 2026, first identifies new requirements to file a credit card debt collection action. At the outset, these actions now require a separate form certifying: 1) that the statute of limitations has not expired, 2) the name of the current debt holder, 3) the date the original credit agreement was executed, 4) the date of default and 5) proof that the debt – such as a cardmember agreement or billing statement – exists and that the plaintiff is in possession of such documentation. This certification form must also be served on the defendant with the complaint. Attorneys who supervise collections, both in-house and in private practice, must take these steps and conduct research on collection actions when filing in the Philadelphia County Court of Common Pleas.

Case managers in the court are tasked with reviewing these consumer credit card debt collection filings. Once plaintiffs get past this first hurdle, the actions are diverted to a newly established conciliation conference prior to the scheduling of a mandatory arbitration conference. Through this conference, the court aims to get parties to the table early in the process to reach an agreement or payment plan. Case managers then run the conciliation conference, which may be conducted remotely. Judge Roberts noted that getting plaintiffs and defendants together often results in a resolution the majority of the time. The court hopes that pushing plaintiffs to speed up the occurrence of this meeting will lead to agreements at an earlier stage in the litigation.

Other Credit Card Collection Diversion Programs

Consumer credit card debt collection diversion programs are not new to Pennsylvania. Lancaster County implemented a program in 2022 providing residents with free credit counselors and court-supervised conciliation conferences. Lancaster County's program automatically enrolls actions filed against borrowers in the diversion program and utilizes public- and private-sector entities to hopefully achieve a solution, including connecting borrowers with a credit counseling agency and requiring credit card companies to file certain documents such as the operative account agreement and proof of ownership of the debt.

The Lancaster County program has had some early successes at easing the civil docket and driving resolution between parties. The American Arbitration Association (AAA) has reported that of the 480 individual consumer credit card debt collection actions filed in Lancaster County from January 2024 to August 2024, parties reached settlements in 128 cases, plaintiffs voluntarily withdrew claims in 68 others, and 22 cases were dismissed by the court. Only 202 cases were left unresolved and returned to the court docket, reducing the number of cases on the normal court docket by more than 50 percent. The program is most effective at "moving some of the more straightforward cases through a lighter-weight process" than the court's usual arbitration measures. The AAA also noted that the heightened notice requirements of the program help ensure defendants are aware of the case and can reach an agreement with the credit card plaintiff rather than be subject to a default judgment.

Pennsylvania's Butler County combines its consumer credit diversion program with a residential mortgage foreclosure diversion program. Butler County requires a court-supervised conciliation conference and requires notice to be served with the complaint. Luzerne County also uses a public- and private-sector program to address consumer debt issues, relying on the county bar associations' pro bono lawyers and a nonprofit counseling agency. Luzerne County also specifies that borrowers will receive an action plan for their debt during their appointment with the credit counseling agency.

Outside of Pennsylvania, New York has created reforms throughout its court system to address default judgment applications for consumer credit cases. New York City does not have a specialized diversion program but requires specific affidavits and notices for consumer credit cases, including those commenced by third-party debt buyers. These requirements were codified under the Consumer Credit Fairness Act on November 8, 2021, and have been in effect since May 7, 2022.

In February 2026, the National Center for State Courts (NCSC) released a debt collection reform implementation toolkit created to assist courts implement reforms to consumer debt court business practices. The NCSC laid out many of its recommendations, including filing requirements and debt documentation, pre-default documentation and enhanced service requirements, many of which have been implemented in Philadelphia. If Philadelphia's new diversion program achieves the same success as New York's residential foreclosure diversion program, there is significant potential for other cities with similarly busy civil dockets around the country to implement consumer credit card collection diversion programs.

The Bottom Line

Currently, this diversion program only applies to credit card debt collection actions and not to broader consumer debt actions. Only actions brought on behalf of credit card companies will be flagged and subject to certification requirements. However, there are plans to expand the program to all consumer debt actions and related appeals.

Aside from the certification requirement, the main burden placed on credit card collection plaintiffs is that they will need to investigate the whereabouts of defendants and serve them much earlier in the process than previously required. With earlier investigations into defendants' whereabouts, consumer credit card debt actions can hopefully be resolved sooner and the burden on litigants and the court reduced.

Collection units of credit card issuers should consider preparing collection counsel with more information at the outset. In addition, issuers' counsel must ensure that collection counsel has the capacity to handle the increased procedural burden.

Holland & Knight is actively monitoring developments related to the Consumer Credit Card Diversion Pilot Procedure. If you have questions or comments, concerns about the program or suggestions for improving the procedure to share with Judge Roberts, please contact the authors.

Holland & Knight Summer Associates Dan Pantini and Ben Fallick also contributed to this alert.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.