On April 17, 2014, Midland Funding LLC, a national debt buyer filed a lawsuit against a consumer in Tulsa County for an alleged “charged off” debt that Midland Funding claimed to have purchased from Citibank (South Dakota), N.A. The lawsuit filed by Love, Beal & Nixon on behalf of its client sought $4,809.84, plus court costs. The consumer was served with a Summons and Petition, however, he didn’t recognize Midland Funding as a company he had done business with and disputed the amount being claimed against him. The Tulsa consumer hired Paramount Law to represent him as his lawyer in court. Paramount Law filed an Answer preventing a default judgment against the consumer and requested basic information from Midland Funding LLC regarding the contract claimed to have been assigned to it and Midland’s alleged acquisition of the same. Instead of providing this information, less than 30 days later, Midland Funding LLC dismissed the action against the consumer.
Debt buyers like Midland Funding often will dismiss lawsuits when consumers engage a debt collection defense attorney like Paramount Law to defend them in court. Why? Debt buyers have flooded courts nationwide with these types of lawsuits, even though they are likely not willing to present them to a judge if challenged. They know that most consumers will not engage an attorney or even file an Answer to the lawsuit, resulting in a default judgment (automatic win) for the debt buyer, which allows them to garnish your wages or bank account without further notice. When a consumer lawyer enters an appearance on the case, they know that they will now need to prove their case, something that they are often unwilling to do. Instead of continuing with the case, they usually will dismiss, moving on to the next “low-hanging fruit.”
One recent study analyzed 4,400 cases filed by 11 separate debt buyers, each of whom filed more than 1000 cases per year. The study found that more than 99% of the judgments against consumer defendants were obtained without a trial, and fewer than 2% of the consumers were represented by a lawyer! It also found that those consumers who did have a lawyer achieved far better outcomes than those who did not.
If you are receiving calls, letters or have been served with a Summons by Midland Funding, LLC or Love, Beal & Nixon, call Paramount Law for a free consultation.