Unfortunately, many debt collectors and
debt buyers make this threat, or dance
around the truth, that a civil lawsuit for
a debt can ONLY result in a money judgment.
So, what can happen if a debt buyer sues you?
Do NOT assume that legal papers are correct; that just because you are sued by some company, that means you do owe them something.
And, even if you do, or did, there may be legal defenses.
The courts are more familiar to lawyers, which the debt buyer suing you will have.
The Rubber Stamp Justice site published an article on debt buyers and state court systems.
Debt suits are contract lawsuits, and will be filed in a state, not federal, court.
These days, you are more likely to be sued by a debt buyer, than the original creditor who lent you money or extended you credit.
The scale of the debt buying industry is hard to overstate. Leading firm Encore Capital claims that one in every five US consumers either owes it money or has owed it money in the past. While a relative handful of large firms dominate the business, there are hundreds and perhaps thousands of companies buying up delinquent debts across the US at any given point in time. (from the Rubber Stamp Justice article)
But, you say, you did borrow the money.
But you did NOT borrow it from Midland Funding or Portfolio Recovery Associates.
How do I know?
Because those companies do not lend money.
The plaintiff is the legal term for the one bringing a lawsuit.
And the plaintiff, the debt buyer, has to prove the case, that you owe them the money, not VISA or Mastercard.
The predictable result of all this is that debt buyer lawsuits are sometimes riddled with fundamental errors. Debt buyers have sued the wrong people, sued debtors for the wrong amounts, or sued to collect debts that had already been paid. In other cases they have filed lawsuits that were barred by the applicable statutes of limitations or were otherwise legally deficient. There have been multiple allegations, some which have led to successful legal cases, that some debt buyer attorneys fail to serve defendants notice of the suits against them in order to obtain large volumes of uncontested judgments.
I know if you are being sued, it is not because you have money laying around to hire a lawyer.
But if you get a complaint, or find out there is a judgment against you, there may be relief under state, or, federal, law.
Contact me for a free consultation.