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Boom in Debt Buying Fuels Another Boom in Lawsuits

Across the nation, there is a surge in lawsuits against people who aren’t paying their bills, driven by the debt-buying industry that has surged in the past three years as debt has become cheaper and cheaper to buy amid hard economic times.

On the same day that Midland Funding LLC filed suit against a New York social worker, it filed 109 lawsuits against consumers with delinquent debt in Bronx County Civil Court. The courthouse has handled 4,279 similar cases since the beginning of the year. None of the debtors sued that day had lawyers and only 10% showed in court.

Roughly 94% of collection cases filed against borrowers result in default judgments in favor of the debt buyer, according to industry estimates. The majority of borrowers don’t have a lawyer, some don’t know they are even being sued, and others don’t appear in court, say judges.

The increase in lawsuits creates problems for the legal system and some judges have claimed hearing as many as 400 debt collection cases in a single day. In a number of cases, the debt buyer’s ignore state and federal laws, such as the Fair Debt Collection Practices Act.

A growing number of cases brought by debt buyers are plagued by sloppy, incomplete or even false documentation of debts, according to the 20 judges around the country interviewed by the Journal. According to a deposition filed as part of a lawsuit against Midland Funding, an employee testified that he signs 200 to 400 affidavits a day and very few are checked for accuracy.

Read the entire story here: Boom in Debt Buying Fuels Another Boom—in Lawsuits

Comments 4 Comments

  1. I’ve been sued by portfolio recovery associates, llc. What can I do to win the case. they don’t want to negotiate my debt; they just demand to pay or deal with law consequences. I need help. they’ve been harassing me calling my work so that’s why I ignored them now they file the law suit. please help. Mike

    Comment by mike chung on December 7th, 2010 at 5:38 pm

  2. Great Information to read, Please share ur opinions.

    Comment by Debt Collection Laws on December 14th, 2010 at 5:31 am

  3. As long as courts keep granting default judgments on all cases where a defendant doesn’t file a response even though they use robo signed affidavits and no admissible proof of debt the debt buyers will keep filing thousands of lawsuits and winning judgments that they use to garnish wages etc… Even if they get caught they never get more than a hand slap so why should they stop doing it?

    Comment by Thomas on March 15th, 2011 at 11:53 am

  4. midland has refused to remove a debt that was not mine. plus my credit report is hurt because of this i called them told them about me reporting to the credit buero’s about stolen identity. they refuse and say the debt is legitimate all because it was linked to my bank account. they should have their license pulled and not allowed to do this repetedly

    Comment by ricky on May 9th, 2017 at 8:29 am

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