Sued by Midland

[marissad]

What is the name of your state (only U.S. law)? Texas

I have been informed that I am being sued by a debt collection agency (Midland Recovery). I have not been served with the lawsuit - but I have contacted the debt collection agency and set up a payment plan to pay off the debt over a year period. I am unclear on what I need to do once I am officially served with the paperwork. The debt collection agency was not very helpful - but it did not sound like setting up this plan would make the lawsuit go away. I have done research - and the debt is only 3 years old so they have the right to file a lawsuit. Do I still need to go to court if I have set up a plan for re-payment?

Thank you for your help in advance.

 

[Zigner]

It's never wise to ignore legal matters.
In other words, if you are summoned to court...go to court.

 

[marissad]

It's never wise to ignore legal matters.
In other words, if you are summoned to court...go to court.

Thanks - I should have maybe been more clear. I will definitely go to court if I have to. I was more looking for any advice as to if setting up the payment plan was an effective way of avoiding a legal situation. Or if there was a particular way to respond to the lawsuit since I have now agreed to pay off the debt.

I will certainly go to court if that is what needs to happen.

 

[adjusterjack]

I have been informed that I am being sued by a debt collection agency (Midland Recovery). I have not been served with the lawsuit -

Then you have not been sued, despite the title of your post.

I have contacted the debt collection agency and set up a payment plan to pay off the debt over a year period. I am unclear on what I need to do once I am officially served with the paperwork.

The summons will instruct you on the necessary response. If small claims (unlikely) there may just be an appearance date. If regular civil you will be instructed to file a written answer within a certain amount of days or risk a default judgment.

The debt collection agency was not very helpful - but it did not sound like setting up this plan would make the lawsuit go away. I have done research - and the debt is only 3 years old so they have the right to file a lawsuit. Do I still need to go to court if I have set up a plan for re-payment?

Yes.

But if you do get served, immediately call the lawyer that is shown on the lawsuit and ask for a dismissal since you've agreed to a payment plan. The creditor has no obligation to dismiss but might do so. If you don't get a dismissal by the response deadline, you'll have to respond.

It's possible that you won't be served at all but you might want to monitor your local court and see if your name comes up.

 

[marissad]

Then you have not been sued, despite the title of your post.



The summons will instruct you on the necessary response. If small claims (unlikely) there may just be an appearance date. If regular civil you will be instructed to file a written answer within a certain amount of days or risk a default judgment.



Yes.

But if you do get served, immediately call the lawyer that is shown on the lawsuit and ask for a dismissal since you've agreed to a payment plan. The creditor has no obligation to dismiss but might do so. If you don't get a dismissal by the response deadline, you'll have to respond.

It's possible that you won't be served at all but you might want to monitor your local court and see if your name comes up.

Thank you so much. I am also wondering if it was the right thing to do to contact them to set up payment if they are already filing a lawsuit (the letters I received from companies offering to assist included a case number).

 

[quincy]

Thank you so much. I am also wondering if it was the right thing to do to contact them to set up payment if they are already filing a lawsuit (the letters I received from companies offering to assist included a case number).

There is a "sticky" at the top of the Debt Collections forum titled "How to negotiate a settlement." It was written by a former debt collector who is now an attorney. It has some good advice on how to work with a debt collector so you can come to a reasonable settlement before court, so you can avoid having to pay additional court costs and attorney fees to Midland.

Midland has had some legal issues in the past over their debt collection practices. You might want to see an attorney in your area (perhaps go to a legal aid clinic) for a review.

 

[adjusterjack]

Thank you so much. I am also wondering if it was the right thing to do to contact them to set up payment if they are already filing a lawsuit (the letters I received from companies offering to assist included a case number).

Probably.

You owe the money.

The longer the lawsuit takes, the more attorney fees get added on.

 

[quincy]

TigerD, the former debt collector/now attorney who authored the "sticky" I mentioned, is on the forum currently, I believe, and he may be able to provide additional tips on negotiating with Midland.

I do think that, because of the past investigations into and lawsuits over Midland's debt collection practices, you would be smart to go over your debt, and all documents you have received from Midland about the debt, with a legal professional in your area, this before you start negotiations.

 

[TigerD]

Just because a debt collector insinuates or even says they are planning to sue you, doesn't mean they are going to.

When I was a debt collector, I had a schtick I would use on particularly troublesome debtors where I would ask at the end of call if they had attorney information they wished to provide at this time. Invariably, they would ask why they needed an attorney. I responded by asking them why they thought they might need an attorney. They would say because you are going to sue me and get a judgment. I responded with something along of the lines of Is that something you want to happen. Then collect the money.

Great success rate on that close. And never once did I say we were going to sue them or seek a judgment.

Midland, however, Midland doesn't have as good training.

If you are sued, you will have to answer and defend yourself. If you can afford a consumer rights attorney - get one.

Although I am branching out into family, veteran's law, and general practice matters, I practiced criminal law exclusively for 24 of the past 30 months so I am not up on recent developments in collections law. If they are claiming to be suing you and don't, you may want to look into filing a complaint with the CFPB.

TD

 

[marissad]

Just because a debt collector insinuates or even says they are planning to sue you, doesn't mean they are going to.

When I was a debt collector, I had a schtick I would use on particularly troublesome debtors where I would ask at the end of call if they had attorney information they wished to provide at this time. Invariably, they would ask why they needed an attorney. I responded by asking them why they thought they might need an attorney. They would say because you are going to sue me and get a judgment. I responded with something along of the lines of Is that something you want to happen. Then collect the money.

Great success rate on that close. And never once did I say we were going to sue them or seek a judgment.

Midland, however, Midland doesn't have as good training.

If you are sued, you will have to answer and defend yourself. If you can afford a consumer rights attorney - get one.

Although I am branching out into family, veteran's law, and general practice matters, I practiced criminal law exclusively for 24 of the past 30 months so I am not up on recent developments in collections law. If they are claiming to be suing you and don't, you may want to look into filing a complaint with the CFPB.

TD

Thank you. They have not served me - but they have filed a lawsuit with the county. I called them yesterday and agreed to pay it over the next year and a half. I am pretty sure that doesn't mean they will drop the lawsuit. So I am not sure if I should start to pay them as I agreed, or if I have to since I verbally agreed? I think they got what they wanted that I panicked and called to set up payment - which I am okay with. But what I am worried about is that I will be paying them and they will also continue to sue me. Any insight on to that?

 

[adjusterjack]

Thank you. They have not served me - but they have filed a lawsuit with the county. I called them yesterday and agreed to pay it over the next year and a half. I am pretty sure that doesn't mean they will drop the lawsuit. So I am not sure if I should start to pay them as I agreed, or if I have to since I verbally agreed? I think they got what they wanted that I panicked and called to set up payment - which I am okay with. But what I am worried about is that I will be paying them and they will also continue to sue me. Any insight on to that?

You're going to end up paying whether they pursue the lawsuit or not and you'll pay a lot more later if you don't start making the payments that you agreed to make.

I suggest that you immediately make the first payment (talking about paying is not paying, paying is paying) and then see if you can get the agreement in writing and the lawsuit dismissed.

Once they actually get a payment you might get cooperation.

If you can't get anywhere on the phone with the CA's rep, pay anyway and if you get served call the lawyer named on the lawsuit papers.

 

[quincy]

Thank you. They have not served me - but they have filed a lawsuit with the county. I called them yesterday and agreed to pay it over the next year and a half. I am pretty sure that doesn't mean they will drop the lawsuit. So I am not sure if I should start to pay them as I agreed, or if I have to since I verbally agreed? I think they got what they wanted that I panicked and called to set up payment - which I am okay with. But what I am worried about is that I will be paying them and they will also continue to sue me. Any insight on to that?

If Midland has already filed a lawsuit against you in court, Midland has to use "due diligence" in completing service (serving you with the summons and complaint). Midland cannot file a legal action and sit on it, in other words, just to have the filing date fall within the statute of limitations. There is a certain amount of time that they have to serve you with the summons and complaint or their action can be dismissed.

I do not see the lawsuit going away even if you have a payment arrangement in place. Debt collection agencies will often want to have a judgment in hand to force payment because a judgment tends to be better than a debtor's promises to pay (although what a judgment can accomplish in Texas is a bit limited in regard to garnishments/attachments, I believe).

With your payment arrangement, do NOT agree to pay Midland more than what you know you can afford to pay. You do not want to default on these payments.

Then wait to be served.

If/when served, you will need to answer the complaint. Some debt collection agencies count on the debtor not responding to the complaint with an answer, and the collection agency can wind up with a default judgment. You do not want a default judgment entered against you. When you are served, this is the time that it can be smart to have an attorney assist you - although a review now could also be smart, because of Midland's history with less-than-honorable practices.

Refer back to TigerD's advice if Midland fails to take any action on their lawsuit.

 

[marissad]

If Midland has already filed a lawsuit against you in court, Midland has to use "due diligence" in completing service (serving you with the summons and complaint). Midland cannot file a legal action and sit on it, in other words, just to have the filing date fall within the statute of limitations. There is a certain amount of time that they have to serve you with the summons and complaint or their action can be dismissed.

I do not see the lawsuit going away even if you have a payment arrangement in place. Debt collection agencies will often want to have a judgment in hand to force payment because a judgment tends to be better than a debtor's promises to pay (although what a judgment can accomplish in Texas is a bit limited in regard to garnishments/attachments, I believe).

With your payment arrangement, do NOT agree to pay Midland more than what you know you can afford to pay. You do not want to default on these payments.

Then wait to be served.

If/when served, you will need to answer the complaint. Some debt collection agencies count on the debtor not responding to the complaint with an answer, and the collection agency can wind up with a default judgment. You do not want a default judgment entered against you. When you are served, this is the time that it can be smart to have an attorney assist you - although a review now could also be smart, because of Midland's history with less-than-honorable practices.

Refer back to TigerD's advice if Midland fails to take any action on their lawsuit.

Thank you. If I do get served, I will definitely answer. I think what concerns me is I will start paying them because I made a verbal agreement to pay. And then they somehow win in court - will I have to pay the full amount of what they are suing me for on top of what I have already paid them? It is worth nothing that the total cost of the two amounts I owe is just under $4,000.00 so we aren't talking a huge sum of money for them. I can likely just pay them if they will agree to take somewhere around half of that - but again, I am concerned if I do that and they still sue me, I will still have issues. I am also not clear on who I would negotiate to settle with - when I called them and set up the payment agreement the guy on the phone said they would dismiss the lawsuit if I paid in full - but I don't trust what he says. Sorry for so many different questions - playing a lot of "what-ifs" in my mind.

 

[marissad]

With your payment arrangement, do NOT agree to pay Midland more than what you know you can afford to pay. You do not want to default on these payments.

Another question I verbally agreed over the phone to a plan that seemed reasonable but I was under pressure. Is that verbal agreement what I have to stick to? Is it legally binding? They said they would send paper I needed to sign regarding the payment agreement but I have read that the verbal discussion is recorded so they will make me stick to it.

 

[adjusterjack]

Probably doesn't matter one way or the other since your wages cannot be garnished in Texas and if you don't keep money in banks there isn't much the creditor can do to you other than have the judgment hanging over your head for many years which has its own consequences.

My advice:

Stop sweating the "what ifs."

Start paying.

See what happens.

Or, tell the creditor to pound sand and/or file for bankruptcy if it suits you.