DEBT BUYERS SEEKING MORE DEFAULT JUDGMENTS

Ohio residents may be interested to learn of a disturbing new trend emerging among debt collectors. When late-night telephone calls or in-person visits fail to yield the desired results, some debt collectors have begun filing lawsuits against consumers hoping that the person will not appear in court allowing them to obtain a default judgment. Many of the people who receive notices of these judgments never had any idea they were being sued.

A 69-year-old retired veteran did an appraisal on his late mother's home and found a lien for a $2,500 credit card debt. The man was concerned because he'd never been informed of the suit. More disturbing, he'd never had that type of credit card. Because he didn't appear in court, the man was unable to dispute the debt, and he wound up having to sell the property to get the lien removed.

Collections lawsuits have skyrocketed in recent years. In 2011, more than 200,000 such cases were filed just in New York. Four debt-buying companies reported that their income from collections nearly doubled from 2009 to 2012, going from $582 million to more than $1 billion. There are no national statistics on the number of consumers that show up to litigate these claims, but one Maryland study showed that less than 20 percent of defendants who were served with a summons in that state challenged it. Because debt buyers often do not have the data necessary to prove their claims, as seen with the veteran, ignoring the summons could be a mistake.

When a consumer is sued for an old debt, a lawyer may be able to help seek documentation verifying whether the obigation is valid. If the company cannot provide it, it may be possible to have the case dismissed.

Source: The Huffington Post, "Debt Collectors Have Figured Out A Way To Seize Your Wages And Savings", Hunter Stuart, June 03, 2014