Arizona has a default judgment problem.  Every day I meet with families and individuals who have been notified that their wages are about to be garnished based upon a default judgment entered years ago that they didn’t even know existed, from a creditor whose name they don’t recognize.

This is a huge problem that is depriving thousands of Arizona families of their right to confront junk debt buyers like Midland Funding, Portfolio Recovery, CACH, Cavalry SPV, and other debt collectors.  Consumers can take action and there are options for dealing with the default judgment through the courts, but the road is often difficult and often courts are hesitant to set aside a judgment that was entered years ago.

How the Default Judgment Got There in the First Place

When a credit card or other debt goes delinquent most creditors will try and collect on the debt for a period of time (about 6 months) and then will charge the debt off.  There is a lot of misunderstanding when it comes to the term “charge off“.  Many consumers believe this is the equivalent of the creditor saying that they give up and that you are now off the hook.

Unfortunately that is not the case.

Enter the Junk Debt Buyers

Cue the Darth Vader music.  Once the debt is charged off it is typically sold to the the junk debt buyers.



A charge off means that the creditor is counting it as a loss on their books but the creditor is still free to try and collect on the debt or, what usually happens is they package the account up with a bunch of other charged off accounts and sell them to junk debt buyers like the ones mentioned above (Midland, Portfolio, CACH, Cavalry, etc.).

When a creditor sells an account to a junk debt buyer they do so at a significant discount.  Most debt buyers pay on average 4 cents on the dollar – some even lower. Also, they get very little in the form of evidence or documentation related to the account, often a simple spreadsheet with names, last known addresses, and some limited account information.

The Debt Collection Lawsuit is Filed with the Court

Junk debt buyers sue people – its what they do.  After the junk debt buyer files the complaint and summons with the court then in Default Judgment Arizona Skiba Law GroupArizona they have 120 days to serve you with the summons and complaint.  To serve someone typically means that a paid process server comes by your house and literally hands you the documentation.

Once you have been served with the summons and complaint then, in Arizona, you have twenty (20) calendar days to file a written response to allegations of the junk debt buyer that are found in the complaint.  This written response is called an Answer.

If you don’t file an Answer within the twenty (20) days time period then the junk debt buyer will seek a default judgment against you.

Over 95% of Junk Debt Buyer Collection Lawsuits End in a Default Judgment

95%.  That percentage is staggering – especially when you understand that the debt buyers file thousands of cases in Arizona each month!

There are literally thousands of Arizona families that are being hit with default judgments each month because they don’t file an Answer to the lawsuit.

I know that it is easy assume that people that owe money simply don’t care and are trying to hide from their creditors and that is why they failed to respond to the lawsuit.  And in some cases I am sure that is accurate.

However what I see literally on a daily basis paints a much different story.

Day in and day out I see lawsuits where they tried to serve a person at an old address, can’t find them, and then get the court’s permission to serve the person by mail – and wait for it – at the same address where the debt buyer knows the person doesn’t live!

Another way that court’s approve “alternative service” is to allow a debt buyer to publish the summons and complaint in some obscure news paper in Casa Grande (or some other town, no offense Casa Grande) with the idea that someone may actually read it and that will lead to an Answer being filed.

I also see process servers who allege to have served someone even though we have been able to prove that the person is out of state, doesn’t live there, is on vacation, in the hospital, in jail, or wherever.  The point is just because a process server says that they served someone doesn’t mean it really happened.

The Arizona Default Judgment Process

When a defendant is “served” and doesn’t file an Answer within the twenty (20) day time period the debt buyer will then file a document called the “Application for Default”.  Arizona is a little different than many states in that we have a two-step default process.

After the Application for Default is filed with the court you will have ten (10) additional days to file an Answer.  This is the court’s way of saying “are you sure you don’t want to file an Answer?”.  If you don’t file an Answer within that ten (10) day period then the debt buyer will file a Motion for Default Judgment.

The Motion for Default Judgment is where the debt buyer has to prove that it is entitled to judgment.  The fact that an Answer wasn’t filed doesn’t help your situation, but the debt buyer must still prove to the court that there is evidence that they are entitled to a judgment.

However, in most cases (particularly in the Arizona justice court system) if an Answer isn’t filed it is pretty much a rubber stamping of the default judgment and the debt buyer gets a default judgment for everything that they are asking for.

The Arizona Garnishment Process

Arizona Wage GarnishmentOnce a debt buyer is armed with a default judgment they then have the power to garnish your wages or levy your bank account.

While the debt buyer is often unable to find an accurate address where the lawsuit can be served they don’t seem to have any trouble finding accurate information on where you bank, work, and even your most current address.

While I can’t attest to having any insider information my theory is that in the initial stages of debt collection (including the collection lawsuit) the debt buyer goes off of the last known address that is in the spreadsheet they received from the original creditor.  This information is often several years old and not accurate.

Then, once they have secured a judgment and can do some real damage they access your credit report to find current contact and employment information.

The debt buyer could access your credit report prior to filing a lawsuit and find your current information but it doesn’t appear that takes place.

Arizona Courts Need to Hold Debt Buyers Accountable and Enforce the Rules

Arizona courts can help to level the playing field by requiring the debt buyers to adhere to the Arizona Rules of Civil Procedure and hold them accountable to putting forth a true good faith effort when attempting to locate defendants in a debt collection lawsuit.

Too often debt buyers are granted permission to serve some one after demonstrating very little effort in attempting to locate the defendant.  With the online resources available to attorneys today it should be the rare occasion when a debt buyer can’t find someone – not the norm.

Second, when a debt buyer approaches a court asking that a default judgment be entered they should require that the debt buyers provide real, admissible evidence as to who the original creditor is, what the amount owed is, and how it is that the debt buyer is entitled to payment (as opposed to the original creditor).

I understand that debt buyers are flooding our local courts with thousands of lawsuits resulting in a huge administrative task to try and process all of the cases in a timely manner.  But it shouldn’t be the citizens of Arizona that end up paying the price in the form of a default judgment that was entered despite the debt buyer not following all the rules.

What Can You do if a Default Judgment Has Been Entered Against You?

If you find yourself in the situation described above you do have options.  The first step is gathering all of the documents in the court’s file.  Before a default judgment can be entered the debt buyer must file an Affidavit of Service with the court outlining how they served you with the summons and complaint.

Once you obtain that document we can sit down and go over exactly what the process server is alleging took place and prepare a response to it.  If we can show that the service of the summons and complaint didn’t happen then everything else that took place afterwords is void and the court must set aside the judgment.

It is important to note that if you were served and simply ignored it or were scared and didn’t know what to do there may be not any real remedies that will allow us to get the default judgment set aside.  There may be other options for dealing with the debt, but setting aside the judgment may be very difficult in such situations.

No matter your situation if you have a default judgment entered against you I am happy to see how I can help.   I offer a free consultation where we can look at your documents and prepare a game plan on how to deal with your default judgment.

John Skiba, Esq.  – (480) 420-4028

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John Skiba, Esq. 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

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