When faced with a difficult situation it is comforting to know your options. If you have been sued by one of the junk debt buyers like Midland Funding, CACH, LLC, or Portfolio Recovery you are likely loosing a lot of sleep over what your options are and what, if anything, you can do about it.
In this article I want to go over your three options when it comes to dealing with a Midland Funding lawsuit.
#1 – Fight Back
When a debt buyer like Midland Funding files a lawsuit against people they often try and make you feel like it is up to you prove that you don’t owe them money. Nothing could be farther from the truth. Midland Funding, as the plaintiff in the lawsuit, carries the burden of proving three things (1) that you had an account with an original creditor, (2) that there is a specific amount of money owed, and (3) that Midland Funding is the actual owner of the account they are suing on.
If Midland Funding can’t prove any of those steps then they don’t get a judgment and you win. If the can prove those elements then they will likely win and you will end up with a judgment – but the burden is upon Midland Funding to prove the elements of the their case. You don’t have to disprove anything.
But that doesn’t mean you can sit back and just hope they can’t prove their case. If you are going to contest the lawsuit you will need to be an active participant in the process. This will require you to draft and file the appropriate paperwork and to gain a working understanding of the Rules of Civil Procedure and the Rules of Evidence.
It is important to understand that if you are representing yourself in court here in Arizona that the judge is required to hold you to the same standards as an attorney when it comes to knowing and applying the rules that are applicable to that court. This means if you blow a deadline or mess up a document you won’t be able to come into court and say “judge, but I wasn’t aware of that rule”.
I tell you that not in an effort to scare you into hiring a lawyer but I want people who are representing themselves to fully understand what they are taking on when they elect to represent themselves in court.
That being said, many times debt buyers like Midland Funding don’t have sufficient evidence to prove their case or will simply “drop the ball” and you will be able to prevail. If you win at court the case is over and the debt is done – they will never be able to come after you again on that debt.
#2 – Settle the Debt for an Amount Less Than What They are Seeking
Settling a debt merely means that you have negotiated a deal with Midland Funding where you are agreeing to pay them an amount less then what they are seeking. The upside to settling your case is that you will have some control over the outcome. You don’t have to settle and so if an agreement is reached it is because you negotiated something that works for you.
The down side? You have to pay Midland Funding money. The key to debt settlement is timing. There are certain stages in the debt collection process that will provide you with great opportunities to get a low settlement. The law firm working for the debt collector wants to spend as little effort as possible to collect as much as possible.
Than being said, many times the best settlements can be reached after you have filed an Answer in your lawsuit and the case is nearing trial – particularly if the debt buyer doesn’t have good evidence of the account.
My suggestion for reaching a good settlement is to first come up with what I call your “settlement budget”. Figure out what you can realistically pay either on a monthly basis in the form of a payment or more preferably what you can pay in a lump sum within the next thirty (30) days.
You need to be brutally honest here. You don’t want to commit to something you can’t do as that will just make a bad situation worse. How much money to do you have saved? Do you have a tax refund coming? Do you have family who can help you out?
Once you have that number put together a plan as to how much you want to initially offer (knowing that they are always going to come back and ask for more) and then relay that offer to the debt buyer. If possible do this in writing (email is fine) and put a deadline when you need to hear back by – don’t leave it open ended. It make take a little back and forth but you should be able to come up with a deal.
And what if Midland Funding is not being reasonable? Then go back to step #1 – fight them.
#3 – File Bankruptcy
Bankruptcy is your debt fighting trump card that you need to keep in your back pocket all throughout the process of dealing with your debts. I understand that you likely don’t want to file for bankruptcy, but if push comes to shove and you lose your case in court and can’t reach a settlement you will likely be facing a wage garnishment and bankruptcy can stop all of this.
Bankruptcy may be the best option especially if you are dealing with a lot of other debt problems. I often tell clients that the lawsuit they are fighting is winnable, but what does it matter if we win this and it is replaced by two more.
Sometimes you have to invoke the nuclear option and just obliterate the debt.
#4 – Do Nothing
I know I said there are three options for dealing with your Midland Funding lawsuit but far too often people choose option #4 – they do nothing at all. There are a very limited number of scenarios where this makes sense. Maybe if your only income is social security and you have no assets to take this might be an option, but understand if you do nothing to deal with your Midland Funding lawsuit you will end up with a default judgment against you and Midland Funding will try to collect on it through wage garnishment or bank levy.
So even if your assets are protected or you don’t have wages to garnish you are still in a spot where you are having to go into court to assert that everything is protected. You are still having to deal with the debt and deal with debt collector.
Don’t choose this option. Face the problem. Deal with it. And make it go away once and for all.
Schedule a Free Consultation!
John Skiba, Esq.
We offer a free consultation to discuss your debt problem and help you put together a game plan to eliminate your debt once and for all. Give us a call at (480) 420-4028