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Default judgments common in debt collection actions

Debt collection lawsuits are increasingly common in Ohio and around the country, and studies indicate that most defendants in these cases do not participate in the legal process, often resulting in default judgments against them. A 2010 report by the Federal Trade Commission indicated, based on attorney estimates, that 60 to 95 percent of debt defendants do not show up. A 2011 report cited by the Center for Responsible Lending said that 80 percent of the default judgments obtained in New York cases came from debt lawsuits.

Debt collectors have grown used to simply winning their cases while providing little or no evidence of the debt owed. They often show up in court unprepared for the defendant to contest the suit. It is therefore possible in many cases to defeat a collection action simply by demanding proof of the debt. The burden of proof is on the debt collectors to provide sufficient evidence.

Responding to a complaint or showing up in court is sometimes easier said than done. People may have to take time off of work and arrange for transportation, for example. And there may be fees associated with filing an answer to the complaint. Those fees can often be waived, though, on a showing of financial hardship, and the chances of avoiding a judgment increase dramatically simply by appearing.

After their entry, judgments may remain on a person's credit report for seven years or longer. In some cases, a debt judgment may lead to car repossession, wage garnishment or other immediate negative consequences. A bankruptcy attorney may be able to help people who anticipate a debt lawsuit or who are being sued over a debt by negotiating with creditors or challenging evidence presented by the plaintiffs. The attorney may also be able to suggest available debt relief options to deal with creditor harassment.

Source: FOX Business, "These 2 Words Could Get You Out of Paying a Debt", September 08, 2014

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