Since the launch of this new website I get several emails each day from people who are being sued by Midland Funding, LLC and aren’t sure what to do. Every now and again I would like to take a few of these questions and answer them here on the blog. Again, my disclaimer, while I am an attorney I am only licensed to practice in the state of Arizona. I don’t know the specifics of your case and thus can’t give you legal advice as to what you should do. My goal with this site is to provide general principles of dealing with debt buyer collection lawsuits to assist people who are representing themselves. To get actual legal advice on your specific case you should contact an attorney in your area.
Midland Funding, LLC is a junk debt buyer. They go out and purchase old debts from credit card companies and similar creditors that have not been paid for a long time. They usually pay pennies on the dollar for these debts. Once the debt is purchased consumers will generally get a letter or two from a company called Midland Credit Management. Midland Credit Management is a sister company of Midland Funding. After the letter is sent out it is usually followed by the filing of a debt collection lawsuit.
The reason you are seeing it appear on your credit report isbecause Midland Funding has likely purchased an old debt of yours and is now showing up as the owner of that debt.
The short answer is yes, they are legally allowed to this. This is why it is so vital that you not ignore debt collection lawsuits. I literally get 3-5 calls a day from people who have been sued by Midland Funding, did nothing, and now they are getting their wages garnished. If you don’t respond in writing to the lawsuit Midland Funding will get a default judgment against you for everything they are asking for. Once a default judgment has been entered they can garnish wages, bank accounts, and seize non-exempt property. Not only that, but once a default judgment has been entered you have lost most if not all of any leverage you had to try and settle the case for a smaller amount.
And the most frustrating thing is many of the lawsuits filed by Midland Funding are entirely winnable. You can win the lawsuit, but not if you don’ t file a response. I recently drafted a “how-to" article on responding to debt collection lawsuits. If you can’t afford an attorney, use it as a guide. But please. File an answer. Give yourself a fighting chance. If they get a judgment they will garnish you. It might not happen immediately, but it will happen. And if you are living paycheck-to-paycheck like most people, this will be devastating.
When you receive a debt collection suit from Midland Funding or any debt collector the thing you need to remember is the Complaint – the document that starts the lawsuit – is nothing but a set of allegations. Anyone can put together a bunch of allegations and sue anyone. It doesn’t mean it’s true. Again, this is the reason you MUST file an Answer to the Complaint you were served with. Once you file an Answer Midland Funding will be required to disclose the documentation they have to support their claims. If they can support them as required by the Rules of Evidence, then the court will grant them a judgment against you. If they can’t prove their case, the court will dismiss the case against you.
But if you don’t file an Answer, Midland Funding gets to skip all the messy “legal" part and the court will grant them a default judgment. In court the burden is on Midland Funding to prove their case. It is not your burden to prove that the debt isn’t yours. And a little hint…most often Midland Funding does not have the evidence they need to prove their case and surprisingly, many times they don’t even show up to trial (or show up with no witnesses and no evidence).
If you have comments or questions please respond here on the site. I would be interested in hearing about experiences you have had with Midland Funding or any other debt buyer.