Sued by a Debt Collector? Don't Give Up! | Summary and Q&A

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January 31, 2017
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Consumer Warrior
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Sued by a Debt Collector? Don't Give Up!

TL;DR

A court ruling in an Arizona junk debt buyer case has resulted in a victory for the consumer, with a potential refund for attorney's fees.

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Questions & Answers

Q: What are junk debt buyer cases, and why are they important?

Junk debt buyers purchase old charged-off debts from credit card companies and file lawsuits to collect on them. These cases are significant as they impact thousands of people's finances.

Q: What happens when a debt is charged off?

When a credit card company determines they can no longer collect on a debt, they charge it off as a loss on their books. However, they can still attempt to collect on it or sell it to a junk debt buyer.

Q: How do junk debt buyers operate?

Most debt buyers purchase these debts for pennies on the dollar, sometimes less than a penny. They then file a large volume of lawsuits to collect on these debts, potentially resulting in default judgments for individuals who do not respond.

Q: What should individuals do if they receive a lawsuit from a debt buyer?

If served with a lawsuit from a debt buyer, it is crucial to respond within 20 days to avoid a default judgment. Seeking legal advice and understanding one's defenses can help in fighting these cases.

Summary & Key Takeaways

  • A court ruled in favor of a client in a case against junk debt buyer Midland Funding, who had claimed the client owed over $20,000.

  • This victory marks the second time the court has ruled in favor of the consumer, potentially resulting in the consumer receiving a refund for attorney's fees.

  • Junk debt buyers purchase charged-off debts from credit card companies and file lawsuits to collect on them.

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