Debt buying in America is a billion dollar industry. Every year credit card companies bundle tens of thousands of dollars of debt they know they’ll never collect and sell them to companies called debt buyers.
These debt buyers then file lawsuits against the consumers alleged to owe the debt.
If you receive an lawsuit for a debt, even a debt you don’t recognize, you need to answer it.
Failing to answer automatically leaves you responsible for the debt.
‘The first time I was sued for this particular debt I was sent a letter saying you can come acknowledge service or we will send a sheriff out to serve you which is of course scary.’ explained Atlanta consumer Jill Sheridan.
Jill found herself without a job a few years ago and her debt began piling up.
‘It was out of necessity and definitely not out of pleasure,’ said Sheridan.
When she was served with a lawsuit by debt buyer Midland Funding LLC she didn’t recognize the amount or the company. She immediately filed an answer at the courthouse.
When she arrived at court for her hearing there were many other consumer defendants there.
‘Basically the attorneys kind of ran the courtroom,’ said Sheridan.
She said most of the other defendants agreed to settle the debt right there. Jill decided not to, instead she questioned the plaintiff’s attorney about the debt.
When the attorney could not provide the necessary evidence the debt belonged to Jill the case was dismissed.
Consumer attorney Chris Armor says Jill Sheridan is in the minority for people served with debt lawsuits.
’90 to 95 percent of these lawsuits going unanswered,’ said Armor.
He says always fight a lawsuit over a debt because just like in Jill’s case many times the plaintiff’s attorney will not have the proof the amount of the debt or the debt in whole belongs to you.
‘I would say it’s very likely that there sufficient errors in the typical debt buyer lawsuit to where you are able to leverage either a dismissal or a very reduced payment amount,’ explained Armor.
Which is exactly what happened when Jill was sued a second time over the same debt, this time in state court.
‘In my case they didn’t have the evidence and they conceded to that in the end,’ said Sheridan.
She says not participating in the process is the worst thing you can do.
After winning her lawsuit Jill began taking courses in law and was recently accepted in to law school. Together with Chris and a few other consumer attorneys Jill runs a free debt clinic at the Decatur Library.
Clark says there are certain questions you need to ask if you are ever served with a lawsuit over a debt. Is the debt really yours? Is the debt a valid one? Is the debt to old for you to be sued for and if it is, is the amount correct?
You need to investigate, you need to defend yourself, and most importantly you need to show up in court. Otherwise you will automatically owe the money.
Related article: Know Your Rights With Debt Collectors