Have you been sued by a debt buyer?

Madison County Courthouse, Canton, Mississippi

Madison County Courthouse, Canton, Mississippi

Have you been sued by a debt buyer like Midland Funding, LLC, Portfolio Recovery Associates LLC, LVNV Funding, LLC, Cavalry SPV or CACH, LLC.  If so, you are not alone.

Who is Midland Funding LLC?

Many who are contacted or sued by a debt buyer like Midland Funding don’t recognize the name and rightfully so.

As the name suggests, a debt buyer buys old debts from banks, credit card companies, retailers and auto finance companies.  Debt buyers often only pay pennies on the dollar for the debt they buy.  As described by Midland’s parent company, Encore Capital, “we purchase portfolios of defaulted consumer receivables at deep discounts to face value . . .”

After it buys the debts, Midland Funding tries to collect.  Midland may initially send a letter offering to settle the debt at a discount to the face value.  If there is no response, or a settlement is not reached, Midland Funding LLC then files a lawsuit to collect the debt they claim is owed.

Motion for Default and Default Judgment

If you don’t do anything, Midland Funding will win the debt collection lawsuit.  First they will file a motion for a default judgment.  Then they will likely get a default judgment.  This basically means that Midland Funding wins simply because no one filed an answer to the lawsuit.  It has been my experience that default judgments usually also include an award of attorneys’ fees, court costs, late fees and interest.  In other words, the debt buyer doesn’t just want you to pay the original debt, they also want you to pay their attorneys fees, court costs, interest and penalties.

Unfortunately, most debt buyer lawsuits go unchallenged

According to a January 8, 2016 article by Jessica Silver-Greenberg in the New York Times, an estimated “95 percent of debt collection lawsuits result in default judgments against borrowers . . . .”  Most of these lawsuits go unchallenged.

Why is this so important? Companies such as Midland Funding have a track record of filing lawsuits that have serious flaws. Many of these lawsuits simply fall apart when challenged.  In large part Midland Funding is counting on the fact that no one responds to most of the lawsuits they file. If no response is filed, you may very well be waiving legitimate defenses to the lawsuit, based on the age of the debt, the validity of the debt, actual ownership of the account, the accuracy of the amount claimed and others.

A default judgment creates a lien

If there is no response to the lawsuit and a default judgment is entered by the clerk of the court, the judgment then acts to place a lien on your property in that county.  Companies such as Midland Funding may then use the default judgment to garnish your wages, bank accounts and other property.

What you can do to stop Midland Funding, LLC

What are my options?  You may be able to win the lawsuit filed against you by Midland Funding LLC or another debt buyer, but you have to respond quickly.  You might also want to try to settle the debt.  I can help you with this.  If you have a lot of debt filing for bankruptcy protection may be a good solution.   Regardless of what you decide to do, you need to act.  Doing nothing will likely result in a default judgment followed by a wage or bank account garnishment.

What to do if you have been sued by a debt buyer

If you have been sued by a debt buyer like Midland Funding, I am happy to meet with you to discuss your case.  I offer a free initial consultation to review the lawsuit to see if it is worth defending.  If so, we can talk about what needs to be done and discuss some affordable options.  Please call my office at 601-853-9966 to set up the free consultation.