#1 Obstacle to Winning Your Debt Collection Lawsuit

Hey everybody, John Skiba here from the Arizona Consumer Law Group. I’m also founder of the Consumer Warrior Project where I provide information to consumers who are dealing with pretty serious debt problems as far as how you can solve those problems.

In today’s video I wanted to discuss with you what I believe is the number one obstacle or hurdle that you need to get over in winning your lawsuit with junk debt buyers like Midland Funding, Portfolio Recovery Associates, Cash LLC, Cavalry SBV and all the many other companies that go out there and buy old, charged off debts.

Now, here in Arizona where I practice law, they flood the courts with lawsuits. Many people are surprised to see just the total volume of lawsuits that are filed by these various debt buying companies and it impacts a lot of people. A lot of families here in Arizona are impacted by these junk debt buying companies.

If you want to learn a little bit more about junk debt buying, which is probably a topic that mostly people like me are just interested in, there’s a great book out there. It’s called, A Bad Paper, by Jake Halpern, which really goes over the junk debt buying process and why there are so many problems with it.

You can also go over to the Consumer Financial Protection Bureau’s website, which is a federal agency, and you could learn really about all the sanctions that they have against many of these junk debt buyers.

But, the purpose of this video, like I said, is to talk about what I think is the number one obstacle that consumers have to come over and this, this is something that was really, again, brought to my attention in a hearing that I was at just recently. It was an arbitration hearing where, you know, we have an arbitrator who’s there to decide whether my clients are liable for the debt or not. And, junk debt buyers are alleging that they purchased the debt from an original creditor and that a balance is owed and that they should be paid it and they often pay pennies on the dollar for it, usually, according to FTC records it’s anywhere from as low as a quarter of a cent on the dollar up to about four to five cents on the dollar, depending on the type of debt that they’re purchasing.

And, the number one thing that I see that people have a problem with is that whether it’s an arbitrator, whether it’s a judge, opposing counsel, they often take the position of, look, these people, the defendants here, they owed somebody. And so, regardless of whether the paperwork is correct or whether the amounts are calculated correctly or whether we even have the right person, you know, all of that can kind of go by the wayside and judgment should be entered, which is really problematic, especially in light of the findings of the Consumer Financial Protection Bureau as to many of the problems in the documentation that these people have.

But, not only that, it’s one of these situations where the original creditor is not suing, you know, my clients, they’re not suing my clients. It’s someone from this other third entity where there’s no contractual dealings between the parties. A company like Midland Funding didn’t loan my client any money. My client didn’t agree to pay them any money and they should be required to establish that they are the actual owners of the account. Not only that, but the fact that they are pursuing this through the courts.

You know, it’s one thing to say that someone owes some money and send letters and ask them to pay it. To me, it’s a whole other thing to bring something into a court proceeding, have the court review the documents and sanction what it is that they’re saying by entering a judgment against that person.

To me, a judgment stands for the fact that the courts have reviewed the evidence, that there’s been a very strict lens, or filter as far as what was actually received based upon the Rules of Evidence, the Rules of Civil Procedure, and that the court found after applying those filters to this making sure that they’re only getting the best evidence that they deemed that, yes there is some liability here. Because once a debt buyer has a judgment, that opens up a whole new world to that debt buyer as far as collection opportunities for them.

They can garnish wages, they can go in and seize money out of a checking account, they can cause a lot of havoc in people’s lives. And so, to require them to adhere to the Rules of Evidence, to adhere to the Rules of Procedure, doesn’t seem to be a difficult thing for the court to do, but you often run into that. There is this bias that hey, they owe somebody, and I have literally had a Justice of the Peace here in Arizona, tell me in a trial proceeding, look, they owe somebody, so we’re going to get ’em, we’re going to hit ’em with this judgment. So, that’s what I see. Sometimes it’s a big hurdle to overcome.

My recommendation is to keep the focus back on the fact this is not the person you entered into the agreement with. This is not the company you agreed to pay. They didn’t loan you any money and they’re trying to seek a court sanctioned judgment saying that they’ve met all the elements that the law requires. And typically, they just simply can’t do that. So, it’s a tough one. It’s something that I deal with and battle with literally every day here in my practice. If you want to learn more about these types of cases, things you can do to resolve them, head on over to my website at ConsumerWarior.com.

I also offer legal coaching services for people who are representing themselves. We often see this to be helpful in situations where the lawsuits are low dollar type suits. Midland Funding is a big one where they file a huge volume of lawsuits of $500 to $1000, which a lot of people are surprised that they go to, you know, the lengths they do with the court proceedings.

Frankly, I’m surprised they take the time to go after these smaller amount lawsuits. But, we offer legal coaching where essentially you’re representing yourself and we assist you with that process whether it be through drafting documents or just guiding you through the process and procedures.

You can learn more about that over at Legal.Coach, that’s the actual website, Legal.Coach. Thanks for watching today.