A detailed overview of being sued by a debt collector (debt buyer) in small claims or district court


A detailed overview of being sued by a debt collector (debt buyer) in small claims or district court

Find out your options on what to do.....

Find out your options on what to do when sued by a debt collector

 

One of your five options when sued by a debt buyer (such as Asset, LVNV, Midland, Portfolio, etc) is to fight the case on your own.

Especially in small claims and district courts, this can be a great choice for you.

But what happens?

What happens from the moment you are sued until after the case is over?

If these questions interest you, then you’ll want to invest about 35 minutes watching the video or you can read the transcript below.

I think you will find this very helpful in helping you to discover the process — and discover the way to bring peace out of the chaos of being sued.  There is a way out.  There is a solution.  One that is right for you — we wish you the best on discovering that so you can put this behind you.

I hope you find this useful and if we can help you, let us know — you can call us at 205-879-2447 and we’ll be glad to help you walk through your options including handling the case on your own.

John G. Watts

Here’s the transcript…

Hello. My name is John Watts. I want to welcome you to our webinar. What we’re going to talk about today is if you’ve been sued in District Court or in Small Claims Court by a debt collector or debt buyer, what is the overall process or the big picture of that. Let’s go ahead and start with this.

The Complaint

I have here a copy of, it’s just a typical lawsuit. This is what’s known as a complaint which is the first thing that will happen in a collection lawsuit. A debt collector or a debt buyer and this particular example, it’s Unifund, but it could be Midland Funding, LVNV Funding, Portfolio Recovery, Asset Acceptance, they’re all sorts of these debt buyers out there. They prepare a complaint.

This is a document that gets filed in court and it says, first of all, who they are, so it’s Unifund, Midland, Portfolio, whoever it is. Then it’ll have your name on it. Up at the top, it says what court it’s being filed in. Is it being filed in Small Claims Court, District Court, is it Jefferson County, Madison County, Shelby County, which county is it?

Then it will say what you’re being sued for. It might be $1,000, $5,000, $10,000. Sometimes it’ll give you a little bit of information about what this debt supposedly is so as you didn’t go borrow money from Unifund or Midland Funding, Portfolio.

Typically, it’s a credit card. Sometimes in the lawsuit, it’ll say this is a GE Money Bank or this is a Chase credit card or Capital One, City, whoever it might be. At the end of this lawsuit, it’ll say, “All right. Based on everything we’re saying in here, we want a judgment against you,” for the amount that they’re suing you for.

That’s what starts the lawsuit.

The Advertisement Letters From Bankruptcy Attorneys And Ferry & Nicholas

Usually, the very next thing that happens from your perspective is you get a letter. You may get several letters but usually, there’s a letter from a place called Ferry and Nicholas or Nicholas and Ferry. I forget which one it is, but they are a “mediation firm.” They’re not lawyers and they usually will write to you the very next day. You get sued on a Monday, and on Tuesday a letter is going out to your house. You get this letter and it says you’ve been sued and it may list the name Midland, Portfolio, whoever. Then it’ll say, “If you want us to help you negotiate or mediate between you and this, debt collector, this debt buyer, then give us a call.”

Now I’ll come back to them in just a moment.

You may also immediately get letters from bankruptcy lawyers.

In my opinion, you should not get any letters from bankruptcy attorneys until after you’ve been served. Our ethical rules say you have to wait 7 days. Then 7 days after somebody’s been served, then you can send advertisement letter to them. Some lawyers don’t follow that and so you may get letters from lawyers. You open up the letter. It says, “Hey, I’m Joe Blow, attorney. You’ve been sued. I can help you file bankruptcy.”

My suggestion is, if a lawyer sending you letters is violating ethical rules doing that, maybe that’s not the lawyer that you want to consider, but that’s up to you.

Going back to Ferry and Nicholas, if you get a letter from a non-lawyer saying, “Hey, you’ve been sued and I’ll be happy to help you negotiate to mediate this,” I think the natural question is:

“Why would I want to deal with a legal situation and have a non-lawyer representing me?”

That doesn’t quite sound right. Again, use your own judgment on that. I’m just wanting to walk you through the process. The first thing is you get sued. Usually, then you get notified by the lawyers or this Ferry and Nicholas place.

You Will Next Be Served With The Complaint

Then the third step is you’ll actually get served. That’s where it could be sheriff’s deputy. It could be a private process server. There’s one called VanSlam that’s pretty prominent.

They knock on your door or they walk up to you in your driveway they say, “Hey! Here’s some legal papers for you and now you’ve been served.”

Being served is significant because that triggers the clock to start running on how long do you have to respond to this lawsuit.

This video is really about being in small claims or district court. You have 14 days to respond. I should have said this. We’re really talking about lawsuits in Alabama and so that’s what the time period is, 14 days from when you’ve been served. Sheriff’s deputy, VanSlam, some private process server or even certified mail. You can be served by certified mail. You have 14 days.

What If You Don’t Do Anything?

Unfortunately, this is what about 80, sometimes 90% of people, this is their response: nothing.

They do nothing.

If you do nothing when that 14 days runs out, then this company that sued you: Unifund, Portfolio, Midland, Asset Acceptance, LVNV, they are going to file a motion or an entry or a notice, all different ways to describe it. Here’s bottom line: they’ll get a default judgment against you even if you don’t owe the debt .

How Bad Is A Default Judgment?

If they get a default judgment, understand this is a real judgment, and now that opens you up to garnishment of your wages, 25%, garnishment up your bank account, the seizing and selling of your car, of your house, put a lien on your property, all sorts of things that can happen. You definitely want to avoid that default judgment.

You’ve been sued. You’ve been served. You’re looking at your time. You go, “Okay. I want to take some action. What do I do?”

Your Five (5) Options

We have a long video on this. I’m not going to go into much detail but you have five options: You can:

  1. File for bankruptcy, very rarely appropriate but it can be appropriate.
  2. You can fight this lawsuit on your own which means you don’t hire a lawyer.
  3. You can settle the lawsuit on your own so don’t hire a lawyer.
  4. You could hire a lawyer to fight the lawsuit or
  5. Hire a lawyer to settle the lawsuit.

Normally, if you’re hiring my firm, these last two were combined because we respond to the lawsuit and we go to the debt buyer, the debt collector, and say,

“Look. You’ve got a choice. You can drop the lawsuit. We’ll pay you no money. You get off of our credit report and we won’t sue you or we’ll go to trial.”

That’s the option we give them. We don’t really negotiate other than we say, “Do you want to fight this or do you want to settle this and get this off our credit report and go away?” Again, I go into that a whole lot more detail about your options in the video that you can watch.

Let’s say that you go, “You know what. I want to handle this on my own. What do I do?” The most critical step is to file an answer to this lawsuit.

File Your Answer

Respond to it. If you’ve been sued in small claims court, they’ll give you a little form and answers. It’s going to have four boxes: A, B, C, D. I think box A says, “You sued me on the wrong county.” Box B says, “I admit everything.” I think box C is, “I admit owe the debt but I don’t admit I owe the full amount that you claim.” Box D is what most folks will choose — “I deny owing anything.” Then it gives you a little space you can type something in or hand-write something in.

In district court, you normally are not given that form but you can find it online or you can hand-write or type an answer. There’s really no magic form.

Here’s the bottom line: You want your name and the name of the company suing you. You want the case number, and that’s gonna be in the upper right-hand corner. They’ll say something like SM for small claims or DV, that’s district civil. You want to write that number in and then you up put what you’re saying in your answer. Sign it and then you file that in the court.

What Do You Put In Your Answer?

I don’t represent you so I can’t tell you what to put in your answer. This is not legal advice. What I’m doing is giving you general educational advice, just showing you the big picture of what’s going on in these lawsuits.

I’ll tell you what a lot of people put down is they say, “Wait a minute. I’ve been sued by Unifund, by Midland, LVNV, Portfolio, Asset Acceptance. I never did business with those companies. I never borrowed money from them. They never fixed my air conditioner, fixed my car, fix my roof. I’ve never had dealings with them.”

So if you never had dealings with these people and you got sued by somebody that you’ve never done business with, I think the natural thing is say, “Wait a minute. I don’t owe this company any money.”

That’s box D.

If these guys can come into court and prove that they own the debt, I don’t care if you owe GE Money Bank, Capital One, Chase, City, whoever it may be, those guys didn’t sue you.

But if a debt buyer sues you, then they have to prove you owe the debt and if they don’t, they lose. Even if they prove this, they have to prove that they own the debt.

I don’t know of any way that you could know whether or not they own the debt when you get this lawsuit because it just says they own it. They could say you owe a billion dollars but just because they say it doesn’t make it true

Most people file and answer, they check that box D and say, “Hey, look. I don’t owe the plaintiff any money.”

Plaintiff is the company suing you, the debt collector suing you. What else do you put in there? You can put other, what are called defenses or affirmative defenses. That’s where you say, “Even if I do owe the money and even if Unifund, Portfolio, whoever owns the debt, they still lose.”

To give you the most common one: statute of limitations. We say statute of limitations in Alabama is 3 years. The debt collectors say it’s 6 years.

Which one is it? Ultimately, it’s for your judge to decide but I think that there’s very strong argument and the correct answer, the correct analysis is 3 years. Almost always, these guys are suing you beyond 3 years. A lot of people put that in their answers: “I don’t know the plaintiff any money and statute limitations has expired.”

What Do You Do With That Answer?

You take it to the clerk’s office. You go to the courthouse. Usually there’s security and you say, “Hey, look. I was sued in small claims or district court. I’ve got my answer. Where do I go?”

The security guys will be able to tell you, “Oh, well, that’s on the first floor. That’s on the fifth floor. Yeah, here’s where you go.” You walk in there and you say same thing: “I’ve been sued,” and say to them (assuming this is true). “I’ve never done this before. I want to file my answer. Am I at the right place?”

Take you a couple copies of your answer so you can give one to the clerk and then he or she will stamp that and with the date and time so that they know when it was submitted. They put that in the file then you want to give them a copy to mark as stamped in so you keep that so that you’ve got proof. “Yes, I did file my answer.” You want one another one of the copies and send it to the collection lawyer.

Make A Copy Of Your Filed Answer

My suggestion is when you get home or get back in your car, take your phone, take a picture of your answer. Make sure you can see where the stamp is showing the date and time. In that way, if somebody ever comes back later and says, “You never filed an answer.” We’ve had this before where the collection lawyers will say, “I want a default judgment because at 14 days has expired, remember you got served here? Your 14 days, now you’re time is gone. They can move for default judgment and they say you never filed an answer.

You can respond, “Wait a minute. I’ve got this right here. I’ve get the answer. See? It’s stamped up here.”

Why do I say take a picture with your phone? What if you lose this? You’ve got it on your phone, but don’t just leave it on your phone, email the picture to yourself. If you have a Gmail account, Yahoo account, some account that’s going to be up in the cloud, email it to yourself so that, again, if you drop your phone, you lose your phone, this paper gets destroyed, you’ve got the proof of it.

You file your answer. What happens next?

You Get Your Trial Date

Usually the very next thing is you get a trial date. That will come in the mail. Usually it’s not a full size letter. Usually it’s going to be about this size.

For most of us, it’s about the same way we get our voter, I forget that technical name but you have a little card you get, it says, “Here’s where you go vote,” and you tear it cross top and you open it up. That’s usually what the trial date comes. Some courts will send it in a letter and you open it up. It says,”Be at trial at 9am at such-and-such courtroom.” It may be very small also.

Here’s the bottom line: You file your answer. You tell everybody who lives with you, “Nobody throws the mail away without me looking at it.” You have to make sure this trial notice doesn’t get thrown away.  It may be stuck in between the Papa John’s coupon and the Captain D’s coupons. If you go, “Oh, it’s just a bunch ads,” you throw it away, you may have thrown away your trial notice. The trial notice does not come by certified mail.

The court has no obligation to call you and no obligation to make sure you receive it so you need to be checking your mail every day.

Go through every piece of paper say, “Did I get anything from the court?”

I’ll just tell you this. In most counties, you’re going to be trying your case 4, 6, 8 weeks after you submit your answer. So if you don’t get the little trial notice within about a week, I’d start calling the clerk’s office and say, “Hey. This is John Watts. I got sued by Portfolio. Here’s my case number. I filed my answer about a week ago or 2 weeks or 3 weeks or whatever, and I haven’t gotten a trial date yet. I just wanna make sure hadn’t missed that.”

If you’re always nice to them, even if you’re not nice, they’re usually nice, but particularly if you treat them with respect, they’re going to be very nice to you. They’re going to look up your case and say, “Oh, we haven’t set it for trial,” or, “Yes, we have set it for trial. Here’s the trial date.”

Now, a little bit of advice. This is true also when you go in to file your answer and when you call the clerk’s office, be respectful of the them. Don’t walk in, Monday morning at 8:30 and be impatient for them. Don’t go Friday afternoon at 5:00. Try to go when it’s not going to be so crazy or if it is really crowded, just be very patient. If you’re calling them on the phone, again, I wouldn’t call right when it’s the busy time for them. Just check in every 3, 4, 5 days until you get that trial notice.

You get the trial notice. On July 15, you’re going to trial. What do you do after the case is set for trial?

Prepare Yourself For Trial

My suggestion is if you’re handling it on your own, let us know so we can send you some information about mistakes that people often make. I think we have seven of them and I won’t go into that here because you can look at that information we’ll send you. That may help you.

Here’s the other thing you do. Go to court before your trial. Your trial date is here, back up a week, 2 weeks, go to court. I don’t mean just any court. I mean, your judge. If you have Judge Amari in Jefferson County, if you have Judge Alsbrooks in Shelby County, if you have Judge Smith, wherever, go to their courtroom and watch when they’re doing small claims or District Court trials, not criminal trials but civil trials.

Here’s what you do: Pick up the phone. Call the judge’s office. If you don’t know who your judge is, you can call the clerk’s office and say, “Hey, who’s my judge?” They tell you who your judge is.

Call the judge’s office and say, “Look. This is John Watts. I got sued by Midland Funding. I have a trial date, July 15. I was wondering are you gonna have any other trials before that so I could just come watch and see what happens.”

Everybody that’s done this has gotten this response. The court is very friendly, very nice, actually pleased that you’re calling because these things are open to the public but really the public never comes in to watch what’s happening. The judges like for the public to see. If you’re going to represent yourself, they really like for you to come ahead of time so that know the process, you know what’s going on.

Why do you do this?

I want you to know:

  • where the courthouse is.
  • I want you know where the judge’s office is,
  • what’s parking like,
  • how do you get through security,
  • where do you find your judge?

Here’s what happens. A lot of people, they’ll say, “Oh, I wanna handle this on my own. I don’t pay any money to a lawyer.” That’s fine. I tell them, “Here’s what you need to do. Go watch trials before your trial.” They go, “I’m too busy for that. I don’t need to do that. I know where the courthouse is.” Then they call me after their trial and they’ve lost.

“What happened?”

“Well, I got confused where the courthouse is. I couldn’t find a parking spot. I had no idea, Monday morning, there’ll be a lot of people there. I forgot about security. I had to stand in line. And I’m like, ‘Oh my goodness. I’m gonna be late.’ I didn’t know you had to go through security. I finally got through security and I can’t remember which courtroom it’s at, so I sat in the wrong courtroom, figured it out, got to the right courtroom. They’re already finished and the judge didn’t seem happy that I showed up, like, 25 minutes late. And I panicked and I just agreed to a consent judgment.”

That happens repeatedly, over and over.

Here’s the solution: If you’re going to do this on your own and you’re not spending money, then spend time. Go the week before. Here’s your trial, go the week, 2 weeks before, find where you’re supposed to go. Find out about parking. Find out how security works.

What do you do when you get there?

You sit down. You look around. Have your notebook. Take a notebook with you. Make notes. What happens when the judge walks in? Normally, everybody stands up. What happens when the judge does what’s called the docket call?

That’s where the judge will be sitting there and the judge say, “All right. I’m calling these cases Midland versus Smith, LVNV versus Jones, Portfolio versus John Watts.”

You’ll see people stand up, lawyers stand up, people who were there representing themselves will stand up except, here’s what you’ll see: if there are 10 people representing themselves, about half of them will stand up. What did the other half do?

They don’t show up.

They lose.

It gives you an idea, doesn’t it? You’ve got to show up.

Then you just watch and observe what happen. It’ll make you so much more comfortable.

Let me tell you this.

I’ve been trying cases for 20 years. When I say trying cases, I mean federal court, jury trials, state court jury trials, things that may last a day, 2 days, or even a week. I tell you that not to brag but just to say I’ve been doing this a long time and I’ve got a ton of trial experience.

If I’m going into a new courthouse, I want to get there beforehand.  Even if I’m familiar with the courtroom. I want to go to that courtroom, sort of get a feel for where do I sit, where’s the jury. You don’t have to worry about the jury trial but where’s the jury sitting, just so you can soak it all in. As what I want to do is remove a lot of the nervousness.

I don’t want you to walk in and have no concern because if you walk into a trial, your trial, the morning of your trial, and you have no concern about it, you may be dead.  🙂

You need to check your heart because your heart ought to be pounding on this but it ought to be under control. That just means you’re interested, that you care about this, you want to do well. You walk in like, “I don’t care.” That’s not a good situation because if you don’t care you’re not even going to show up. You want to care but you don’t want to be just overwhelmed with nervousness or anxiety.

What Happens At Your Trial

A lot of times the collection lawyer will have some papers. You’ll see him and he’ll say, “Come out in the hallway with me.” The judge may say, “Go out in the hallway with this lawyer,” and the lawyer will say, “Look, I got all these papers. I got statements. That proves you owe this debt.”

Nope.

All it proves Mr. Collection lawyer is that you have statements. That’s all it proves.   Their idea is we got statements, so you owe the money.

“I don’t know if I owe the money or not. I don’t know who you are.”

“Oh, well, we’re Midland and since we have the statements, that proves that you owe us the debt.”

No, that proves that Midland sued me and Midland has copies of the statements. Obviously, I’m being silly when I say this but the lawyers got the paper, ok — if somebody walks by and grabs those statements out of his hand, now that person has the statements. What does that prove? All it proves is that person has the statements.

It doesn’t prove you owe that person any money. This whole thing about, “Oh, I got the statements.” A lot of times, the lawyers think like, “This is the gospel of truth here.”

No. It just means you’ve got statements.

There may be a dozen companies that have copies of the statements. It doesn’t mean a dozen companies can sue me or that I owe a dozen companies.

If I owe the debt to GE Money Bank and GE Money Bank has sold that debt, I only owe it to whoever truly owns that debt. Midland says, “We own it.” I don’t know, do you?

We’re in court.

Prove you own it.

They’ll say, “I tell you what I have.” They’ll take the purchase agreement and purchase agreement is just a contract. They sometimes act like there is no contract.  You don’t buy $500 million worth of debt on a handshake or a text message.

No. There’s a contract. They’ll bring you the first page of the contract and they’ll say, “See. Here it is,” and written across it will say Purchase Agreement, it’ll say Midland and GE Money Bank agreed to sell the accounts listed in Exhibit A and there are no representations made other than what’s in the purchase agreement.

They’ll go, “See. Here it is. We proved it.”

It’s one piece of paper. This is the contract that you bought $500 million dollars worth of debt?

“Oh, well, no, no, no. See, this is the front page. This is all we’re gonna give you.”

If you bought the debt, why would you not introduce in the evidence the whole agreement. Their response is it is super secret.

That’s a little bit of a problem because Midland sued me in court so Midland has to prove it owns the debt.

They argue, “Yeah. But, I mean, we wouldn’t make this up”

As if all the stuff with the big banks, Bank of America, etc. making documents up, did that not happen?

Remember robo-signing where they had people signing thousands and thousands of affidavits a day to stake people’s homes. The people signing the affidavit said, “I swear. I swear. This information is accurate.”

Do you know what the problem was? They had a dead guy sign an affidavit. They just had a stamp just signing over and over, where they had the notary who said, “Yeah, this person really signed.”

They were dead. They just had them already notarized. Nobody was looking at this stuff.

Really? Some debt buyer that comes along and buy something for pennies on the dollar, they want to come into court and go, “Well, I mean, if we sued you, you have to believe us.”

Actually, I don’t believe you, so you have to prove it and bringing them one little piece paper ain’t going to prove it.

They go, “Oh, well, in addition to this, we have another piece of paper that has your account number on it.”

So what? What does that prove? Besides all that, a piece a paper isn’t gonna do it in my opinion. They had to bring a witness to say, “All right. Here’s the debt.”

This piece of paper will represent your debt — GE Money Bank has it. You’re being sued by Midland. How did they get from GE to Midland?

I understand this piece of paper exists but somebody has to come in and testify for GE Money Bank saying “Yes, we sold it to Midland.”

But what if GE sold it to another company who then sold it to Midland?

Now, you got to have more witnesses there. Let’s assume (I’ve never seen this happen but let’s assume) they can prove it goes from GE Money Bank to Midland.

Does Midland still own it or did they transfers to this guy over here? I don’t know. Somebody’s got to come and testify.

Here’s what these debt buyers say. They’ll say, “That is outrageous. We are not gonna send a witness and we’re not gonna prove all this stuff. We sued you. Remember, we get the statements. That’s all the proof.”

Well, let’s see.

Can the debt buyer get the statements in the evidence?

They’ll go, “This is unfair. This is gonna really be a burden on us.”

I tell you what. When I sue these debt collectors in federal court, Midland Funding, LVNV, Portfolio, Asset Acceptance, Unified, all these different debt buyers we sue in federal court, their argument is, “Yeah, I don’t have any witnesses. I don’t really have any paperwork because, you now, it’s kind of outrageous to expect me to prove my case in court. I mean, come on. I said that you did this bad stuff. That ought to be good enough.”

I will get thrown in jail by the federal judge if I did that in federal court.

These debt buyers often go to small claims or district court and argue, “Yeah. I don’t have anything. I shouldn’t have to prove anything.”

No? When I get sued and I get served, when I file an answer denying that Midland or Portfolio own this debt and that I owe you any money, then you do have to prove it.

That’s why we have trials. It’s easy to talk a big game but at trial they have to walk the walk. They have to prove it.

After Trial, What Happens?

Now, what happens at trial, let’s say they win. They proved you owe the debt. They proved they own it. They win. Now you have a judgment against you. You can either pay that judgment, you can do nothing and they will garnish your wages, garnish your bank account, same thing as a default judgment.

Or you can appeal it. You have 14 days to appeal it to circuit court.

What happens in circuit court? It starts all over, as if what happened down here in small claims or district court never happened. It’s because you have a right to a trial by jury.

What if you win at trial in small claims or district court?

Midland, Portfolio, whoever, they have 14 days to appeal it because they have a right to a trial by jury and we have no juries in small claims or district court.

What if you win and they don’t appeal it? What does that mean? What it normally means is you do not owe this debt. Midland sued you, said you owed $5,000. Now you have a judge that enters an order that says judgment for defendant. That means you do not owe Midland that money.

What are the implications of that?

Did Midland credit report that you owe them $5,000? Now we have an order. Midland started this fight. They started this lawsuit and they lost it — but they’ve been telling the world that you owe $5,000.

Now we know from this order, you don’t owe $5,000. Seems like a problem for Midland. They sued you and said you owe $5,000. It’s a problem. Before they sued you, they wrote a letter probably or had their lawyers, Zarzaur or Holloway and Moxley, write you a letter saying you owe 5,000.

It turns out that’s not true.  This normally violates the Fair Debt Collection Practices Act (FDCPA) and other laws..

Then what did they do afterward? We have even had Main Street Acquisition, it’s a debt buyer. They sued our client and lost. Then they wait a year, year and a half later, they sue him again, the same debt. Main Street, same defendant, same debt, same court. The only thing they did is they switched collection lawyers because you can’t go back to the same collection lawyers and ask them to sue again because that’s like the most egregious, the just most horrendous example of a bogus debt collection lawsuit. Once you lose, it’s over. They did it again.

We see that.

Sometimes we see people continuing the credit report. We see debt collectors, debt buyers, writing you letters saying, “You still owe the money.”

Had a collection lawyer even say, “Pay us the money. If you don’t pay us, we’re gonna sue you.”

It’s like, “Do you remember we already went down this trail?”

When that happens, they owe you a bunch of money because you’re going to sue them if you choose to do that. If you’re successful, pretty terrible conduct for the debt buyer to do that.

I hope that this big picture overview is helpful to you. I haven’t tried to get into all the details, all the exceptions to the exceptions, but just to give you a big picture.

I’ve been sued. What do I do? If I want to try this on my own, how do I handle that?

I hope this is helpful.

My name is John Watts.

You can contact me at 205-879-2447.

You can also contact us through AlabamaConsumer.com.

If we can help you in any way and you live in Alabama, just reach out and touch us. Give us call, contact us through the website.

If you found this video and article to be helpful, please share or you can comment below.

We appreciate you helping us to get the word out there so that people will not have a default judgment but, instead, will take action.

I want to congratulate you because I know that you’re going to take action after watching this.

Let me know if I can help you in any way. Thanks. Have a good day.

-John G. Watts


46 Comments

  1. Martha says:

    I am being sued by Holloway and Moxley for Midland Funding. My court date is this morning and I am regretting not hiring a lawyer. I don’t know them but have had dealings with Holloway and Moxley before and know the people working for them to have no shame. We got in trouble when my husband had 4 strokes right together. Holloway and Moxley scared me into making a agreement to stay out of court. I was paying and missed one payment, it was 2 weeks late so I paid 2 payments but they filed garnishment. We scrambled and sold everything we could to pay it off. Turns out my check had cleared the bank before they filed for garnishment. We went to court on one and had a lawyer friend found out about it and met my husband at court, We won and you are right 1 year later they sent another collection agency to tell us they were suing again for the same suit. this happened twice after that case. what I am being sued for is from 2008 and now I am nervous about trying this on my own. I just now found my letter from you or I would have called. I recommend anyone reading this to call you before it’s too late.

    • John Watts says:

      Martha,

      Sorry you are dealing with this.

      Is the lawsuit you are trying your case on this morning a new lawsuit or a continuation of the one from years ago where you made an agreement with Holloway & Moxley?

      I’m going to send you some information by email.

      Hope things go well this morning….

      John Watts

  2. Lesley says:

    Thank you Mr. Watts for the informative video. I am not located in Alabama, but I came across your website during a Google search on answering a summons and complaint. I was served by an out-of-state debt collector law firm for it’s “client” Portfolio Recovery, LLC. Ironically, This law firm has already been well-fined by the courts for it’s bad debt collecting practices, and they are obviously still at it. I am trying to represent myself. I called the county clerk’s office because there isn’t a Docket number or court date on this “official looking” summons and complaint. Apparently they do not need to file it with the court first. It’s been over a couple weeks since I was served and still no record of it being filed with the court. My question please…I have my answer, do I need to BOTH mail my answer to the law firm and file with the court?

    Thank you!

    • John Watts says:

      Thanks Lesley! Appreciate the kind words.

      Have you spoken with a consumer protection lawyer in your state? At least at my firm we’ll talk with someone about a collection suit for free. We go through the options. I would think (hope!) lawyers do that in your state also.

      Good old Portfolio Recovery…..

      Well, as far as the docket number, etc. I’m not sure how your state does it but sounds like you have that worked out. As far as mailing copy to the lawyer, I don’t know what the rules are there but at least here and in federal court you always send a copy to the other side. Give a lawyer there a call to see what your rule is….

      Best wishes and keep us posted on how this works out for you.

      John Watts

  3. Linda Glisson says:

    I had a credit card from 2005 in my name and my LLC, Platinum Lending. I was only in business less than one year with no employees when I had to have open heart surgery. I never knew I had to legally shut down my LLC. In 2013, I used this credit card out of town to purchase my insulin and other miscellaneous items. America’ First Federal Credit Union is who is suing.They first sued me personally and got a judgment and now suing Platinum. I have a District court date Oct. 19 where I have to show payroll records. I never had employees and I had no company debt at the time. I have one thing in my name and that is a car I purchased for $650. I am disabled and on Social Security. I have thought of filing bankruptcy as I have other unrelated judgments for a total of $8000.00. Not sure how to handle court date and what to say.

    • John Watts says:

      Linda,

      Sorry you are in this situation.

      General rule is if on Social Security, then a judgment can’t get that money.

      Call my office at 205-879-2447 and ask for Carolyn — we’ll help you think through what to do and whether it makes sense to file bankruptcy. My gut feeling is no need to file bankruptcy if these guys can’t get anything from you (i.e. you don’t own a house and your income is social security).

      Thanks and be glad to help….

      John Watts

  4. rose ramirez says:

    I was sued by portfolio recovery, never heard of them before now, I have a pretrial date coming up, I pulled my credit and saw this company on it, seems as if they bought my debt from another company, however the portfolio recovery is showing I owe zero balance,so how are they suing me if the balance on their part is zero? and also I check i research on them and they themselves have been sued by consumers and lost for illegally harassment. im a single mom struggeing and on foodstamps, how can i afford to pay them if they can prove their case

    • John Watts says:

      Rose,

      Sorry you are being sued by them.

      Couple of thoughts and questions for you:

      1. Get with a lawyer in your state — I can only speak to Alabama but even in Alabama you need to get with a lawyer.

      2. Are you sure the account they sued you on is the same account that is reporting on your credit report as a zero balance?

      3. If you lose, they then have to collect on the debt. Sounds like they would have a hard time collecting but the judgment will grow with interest. So the objective for you is likely to win your case or settle it where you can live with the settlement.

      4. I come back to talking to a lawyer — if you were sued in Small Claims or District Court in Alabama, it is very doable to represent yourself. May not be the best move but it can be a good move. If sued in Circuit court — much harder to do so.

      Wish I could give you more direct suggestions but so much depends on where you are sued, for how much, and what your defenses are.

      Bottom line call a consumer lawyer (if in Alabama call us at 205-879-2447) to get the lay of the land so you can make good decisions.

      Thanks for your comment…. and I wish you much success!

      John Watts

  5. Janna says:

    My parents gave us an acre of their land. We used it to get mobile home put on it. My parents address is 165 and our was 169. The lot description is correct but not the address on ALL the mortgage paperwork. We told them verbally from the start but they never corrected it. When we were served foreclosure and ejectment letter by the sheriff’s deputy, he delivered it to my parents (at 165) because he didn’t want to travel down our driveway (169). The police officer still left the summons with my parents even after they told the officer that our home was located behind their house and that we were at home. Our and my parents driveway combine when meeting the main road but mine continues straight and my parent’s veers left. Was that a legal serve?

    • John Watts says:

      Janna,

      In Alabama I don’t think that’s valid service.

      You want to make sure and take action though — I would be hesitant to rely on this not being good service. The court could be confused and think you were served, etc.

      Give us a call if you are in Alabama and want some thoughts. 205-879-2447.

      You might also check out this article/video on ejectment lawsuits after a foreclosure.

      Best wishes!

      John Watts

  6. Melissa says:

    John-

    I found your video very informative however, I am being taken to small claims court in Baldwin, AL at the end of January by CACH, LLC. I have never had any communication with them prior to being served and I cannot afford an attorney. I’m kind of freaking out as I am trying to represent myself and I do not do well speaking to people I do not know and I am worried that I am going to break under the anxiety of things and end up with a judgement. I don’t see anything from CACH, LLC on my credit report and there are a few things in the papers that I was served that are raising a flag for me such as inconsistent dates. The Exhibit B “Bill of sale” has three different dates on it and the Affidavit has yet another date. (There is also a typo on the date for the Bill of Sale, it is dated- January 26, 20616 is that relevant?) I am probably overthinking on all of this but I am hoping you may have some pointers for me.

    Thank you for your time
    Melissa

    • John Watts says:

      Melissa,

      Thank you for the kind words about the video.

      We can help you get prepared for your trial. I have some resources I can share.

      Will you call our office at 205-879-2447 and ask to speak to Carolyn. She’ll pull your information and set up a call with me first of the year.

      Thanks!!

      John Watts

  7. […] your case is in Small Claims or District court, then normally the actual trial will take less than 30 […]

  8. David Meinke says:

    You could be making more money in Hollywood.
    Love you man, beautiful video.
    Is it relaxing step by step.

  9. Mitch Cason says:

    I have a question about Date of first Delinquency what does it mean and where can I find it in the FCRA?
    thank you

    • John Watts says:

      Mitch,

      Normally this means when you first were about 6 months late. So it is not the first time you missed a payment by a day or by a month.

      It can get confusing because sometimes the “first delinquency” is reported in some versions of the report. This would be the first time you were 30 days late.

      As far as the actual text of the FCRA, hopefully this will help:

      15 U.S.C. § 1681c
      (c) Running of Reporting Period
      (1) In general. The 7-year period referred to in paragraphs (4) and (6)6
      of subsection (a) shall begin, with respect to any delinquent account
      that is placed for collection (internally or by referral to a third party,
      whichever is earlier), charged to profit and loss, or subjected to any
      similar action, upon the expiration of the 180-day period beginning
      on the date of the commencement of the delinquency which immediately
      preceded the collection activity, charge to profit and loss, or
      similar action.

      Let me know if this is what you were looking for or if I missed your question.

      Also, this is normally easier when looking at your actual report so I suggest get with an FCRA lawyer in your state to help you look at this and make sure the reporting is correct.

      And if you are being sued — the topic of this article — it is very wise to look at your reports to see what the dates are as often this will be different than what we see in the lawsuit. This can have major implications for statute of limitations, for example.

      Best wishes!

      John Watts
      205-879-2447 if you are in Alabama

  10. Keousha says:

    I’m being sued by an old apartment complex where I signed a lease in 2012 and had an eviction. I never received any documents stating that I was being sued until last month when they garnished my accounts and took everything I had in them.

    My question is I have a house that I share with someone that has my name on the lease will they be able to put a lien on it for a $3,000.00 debt balance or will they keep trying to garnish my account?

    I live in the state of Alabama

    • John Watts says:

      Keousha,

      The first step is to get rid of the judgment if you were not served. If the judgment goes away, the garnishment goes away and they return your money they garnished. And if no judgment, then nothing that can be put on any property.

      Second, I’m a little unclear on the property you are in now. Do you own it? Or do you rent it? If you own it, and the judgment does not get set aside, then they may can put a lien on it or try and force a sheriff’s sale.

      So give us a call at 205-879-2447 and ask for Carolyn and she can look up the case. Let us see what is happening with the alleged service so we can help you see if the court believes you were served or not. Then we can chat about the next steps to take.

      Thanks!

      John Watts

  11. Faye Carroll says:

    Hi John,

    I’ve been watching your Youtube videos and just wanted to tell you that I think you’re adorable!
    Love your soft voice, too!

    Faye Carroll

  12. Nam says:

    Hi John,

    My mother just got a Notice of Small Claim Trial saying she needs to go to court and attach to it is this blue sheet of paper stating she is being sued by some Acquisition company. She is being sued on a debt a debt where it says the last date of payment was in 2012. She don’t think she got a complaint letter nor did a policeman or someone come up to the house and gave her any paper. What should be the next step she takes? Should she contact a lawyer? It has been so long she can’t even remember if she has already paid off the debt or not. She said this happened before and she set up a payment plan and then the monthly payment mail stop coming so she thought she was done paying.

    • John Watts says:

      Nam,

      Thanks for your comment/question.

      I’m assuming you are in Alabama as that is all I can speak to.

      Here’s my suggestion — call us at 205-879-2447 and ask for Carolyn. We need to look the case up on “Alacourt” the online court system so we can see what is happening.

      Then we can go over her options with her — fighting or settling the case.

      Be glad to help her — and we know this is frustrating when sued so many years after you believe the debt is paid off. We can help her though to figure this out.

      Thanks!

      John Watts
      205-879-2447

      • Nam says:

        John,

        Thanks for replying so quicking John especially during the holidays. I am sorry I forgot to mention that I am in Massachusetts near the Boston area.

        Thank You,
        Nam

        • John Watts says:

          Nam,

          You are welcome and best wishes! Have a great New Years!

          John Watts

          • Nam says:

            John.

            Does the number you provided also work for Boston or is that only for Alabama? Also, I would like to wish you a Happy New Years.

            Nam

          • John Watts says:

            Nam,

            We can’t help you since you are not in Alabama. The phone works for anywhere but we are not licensed in your state and can’t access the court system there or give you any advice.

            I’m sorry we can’t help you any more.

            Hopefully, this article gives you a starting point to ask some questions of a Boston consumer protection lawyer.

            You have a Happy New Years also!

            John Watts

  13. Shauntae says:

    Hi John!

    I reside in SC and I have been receiving mail from LVNV funding since June 2017 of being sued over a debt. When being served the first time, it was just to notify me of the debt. I have never heard of this company. He told me that they only make contact by mail and that was my first time getting mail from this creditor. At first, I was in panic and I said that if he send me the information, I would set the payments up. I never signed any documents because I then realize that this wasn’t the company where the debt was first sold. He wanted me to provide him with that information, but I explained to him that if he bought the debt, he should know. Long story short, I got a letter stating that he was going ahead with the motion to sue. This was February 2018. I just received a letter today saying that because I did not show up to court I am order to pay the amount owed. But what if I never got a notice? I immediately picked up the phone to call the court office and told him what happened. I am now awaiting a call first time in the morning when he has looked over what happened. I have all the letters that were written to me. I also have documentation that he sent to me when asked but it only provides a bunch of letters and numbers. What would happen now that I have been ordered to pay but haven’t received notice of hearing?

    • John Watts says:

      Shauntae,

      Sorry you are dealing with this. Mission critical to find out the details of the lawsuit, you supposedly being served, and the judgment.

      I don’t know the rules in South Carolina but check with Penny Hays Cauley in South Carolina — she is a very smart consumer lawyer and I bet she can help you understand what’s happening.

      Best wishes on getting this handled quickly.

      John Watts

  14. Billy palmisano says:

    Thank you for what you do and looking out for people that have had a rough time and helping them with issues. Do you by chance do anything in Louisiana or know a reputable person as good as you. I just found a form on my door to call to receive papers that I’m being sued.

    • John Watts says:

      You are welcome Billy — thank you for the kind words.

      I don’t know anyone in Louisiana but do a search for “consumer protection lawyer” and then visit their websites to see what information they offer.

      I would think they could tell you over the phone your options on a lawsuit once they know who sued you and for how much.

      Sorry can’t help you more.

      Best wishes!

      John Watts

  15. Raymond says:

    I watched your video on YouTube and i know that you represent Alabama only. I am in the exact situation you are talking about. My question is, do you have affiliate lawyers in Michigan that handle this situation?

    • John Watts says:

      Raymond,

      I’m sorry I don’t.

      I would suggest looking at some consumer protection lawyer websites and seeing if they have any good info. Then call and ask how it works in Michigan with being sued.

      What your options are etc.

      Best wishes in your search and I truly hope you find someone who can help you ASAP.

      John Watts

  16. Maria says:

    Hi

    I am being sued by a creditor Jefferson Capital. They sent over their initial Statement of Claim. In it they mentioned ( See accounting, hereto attached as Exhibit A) but when you go from page 1 which is the statement of claim, and page 2 shows the assignment and bill of sale, Exhibit F, which is another assignment and bill of sale…then the rest is copies of a bills from Fingerhut ( they original creditor ) I sent an answer denying all claims and stated there isn’t an Exhibit A attached to the statement of claim at all. And I requested a Discovery to show the CONTRACT signed showing I owe this debt, and I requested Exhibit A. Jefferson Capital sent a response sending the same documents without Exhibit A again. I have a court date coming up here in Atlanta GA. June 25th. What would you suggest I do in court? File a motion to get evidence thrown out of court?

    • John Watts says:

      Maria,

      What you have described is typical of the Jefferson Capital suits I see in Alabama. I can’t advise you what to do in Georgia as I’m not licensed there — I would get with a consumer protection lawyer there in Atlanta area who defends consumers from suits by debt buyers.

      Here is a recent video I did where I beat Jefferson Capital in trial — it might be of some interest to you. https://youtu.be/KYgAN_eJwmM

      At least in Alabama, keep in mind you must remember the difference in you owing the debt and Jefferson Capital OWNING the debt. I don’t know how the judges rule and handle evidence etc in GA so that’s why you need a local lawyer to tell you that.

      If you were in Alabama, I would just go to court and beat them at trial if possible. I would not give them any warning about where they are deficient but everyone has their own style. 🙂

      Best wishes and let us know what happens thanks!

      John Watts

  17. Arthur says:

    i have been sued by midland and Moxley Association. And this account has been traveling from one to another. I have had my checking account garnished, and had money taking out, I wrote a letter to the court about this and also disputed this with Credit Karma. know receiving letter that my check will be garnished for 25 per cent.

    Need Help, please response.

    • John Watts says:

      Arthur,

      Call us at 205-879-2447 and ask for Carolyn. I’m assuming you are in Alabama — Moxley & Associates handles cases in more than Alabama but most of their business is here.

      We’ll be happy to look up your case and see what we can find and then let you know your options.

      Keeping it real — if you have a judgment against you, and you were properly served, your options are limited. No easy solution but we’ll help you think through the options you do have.

      Sorry dealing with this and we’ll be happy to help — call us at 205-879-2447.

      John Watts

  18. Lise-Anne Charbonneau says:

    Hi John, I have a court date 8/28/18 1:30pm Calvary SPV for a cc debt I incurred w Citibank in FL. They’ve followed proper protocol and I am going up to the podium pro bono. Any suggestions beyond what you have noted in your blog? Are you aware of anyone in Florida that has won against these debt collector poachers? Many thanks, LA

    • John Watts says:

      Lisa-Anne,

      I wish I knew more to help you but I don’t practice in Florida so I don’t know the rules or customs there.

      I don’t personally know anyone who has beat Cavalry but I’m sure lots of folks have.

      My suggestion is to call a consumer protection lawyer — find one who does debt collection defense — and see what your options are.

      Here’s a good place to start looking — https://www.consumeradvocates.org/find-an-attorney

      Best wishes!

      John Watts

  19. Bob says:

    Thanks for the great videos and information! I have watched most if not all of them. I am facing a small claims suit against Midland in Alabama. I have talked briefly to Carolyn, and received your “seven mistakes” pdf. I completely understand challenging the chain of ownership. My question is what is the best strategy for attacking the validity of the affidavit? It is obviously a robo signed example that matches word for word at least a dozen different ones I’ve found online with different names on them. Also I’ve read from other attorneys websites that they will often demand that the JDB provide detailed account reports from $0 to the alleged current balance. Is that a valid argument in Alabama? Thank you for your time!

    • John Watts says:

      Bob,

      Thanks for the nice comment — appreciate it!

      The affidavit can be challenging in Small Claims court but there are ways to fight them.

      Few reasons why.

      First, there is no discovery so you can’t really prove how the affidavit was signed. They do all look alike but that does not mean they are illegally signed.

      Second, a small claims judge has the discretion to allow an affidavit or to not allow them.

      But there are some ways to fight these.

      First, there is a concept that any documents relied upon in an affidavit should be attached. These affidavits will say “We bought the debt — see bill of sale.” The bill of sale proves nothing — it is one piece of a much larger document. The actual contract where the debt buyer supposedly bought the debt is called the “Purchase and Sales Agreement” or the “Credit Card Purchase Agreement” or something similar. It will be named in the Bill of Sale.

      That is what we believe should be attached.

      Second, there is a concept that if part of a document is introduced, the full document should be introduced into evidence. So if this was a case about my mortgage, the judge would not allow me to just introduce one page or one exhibit of the mortgage. I would have to introduce into evidence the whole document. I have never seen their affidavits do this so this is basis to challenge them.

      Third, often the affdiavits are contradictory — so read over everything carefully.

      Fourth, the affidavit may not cover the “complete chain of title” — so it may say the debt went from Chase to Midland to LVNV. But you read the Bill of Sale to LVNV and realize Midland sold it to some other entity who then sold to LVNV. So it is missing that step.

      Finally, I argue the rule allowing for affidavits makes sense for two neighbors suing each other. Don’t make them bring live witnesses. But for a professional company that sues 100 times a month or 500 times a month in Alabama? Professional plaintiff? They should have to bring witnesses.

      Best wishes and you also might want to send directly to the credit reporting agencies a letter like this (substituted Midland for “DBD”). So you dispute the debt before trial.

      Use your own judgment as you are representing yourself but this might give you a good starting point and you can make any changes you need. And always verify addresses — they can change.

      VIA CERTIFED MAIL – RETURN RECEIPT

      DBD
      list address

      Experian
      701 Experian Parkway
      Allen TX 75013

      Equifax Information Services, LLC
      P.O. Box 740256
      Atlanta, GA 30374

      Trans Union
      P.O. Box 2000
      Chester, PA 19022

      Innovis Consumer Assistance
      PO Box 1640
      Pittsburgh, PA 15230-1640

      To Whom It May Concern:

      You are reporting one or more DBD accounts claiming that I owe DBD money. To be clear, I owe DBD nothing and there should not be any DBD accounts on my credit report.

      DBD does not own any alleged debt that I owe and I want any and all DBD accounts deleted.

      DBD sued me and it knows I do not owe DBD any money on any account.

      DBD is an untrustworthy furnisher of information – you know this and I know this. Delete all such DBD accounts from my credit reports.

      If you will not delete any and all accounts, please explain in detail in writing. Do not send me a form letter please. I just want you to delete any DBD account.

      Thank you for fixing this problem for me so it won’t cause me any more problems.

      Sincerely,

      Name
      Address

      DOB:
      SS: xxx-xx-

      Best wishes!

      John Watts

      • Bob says:

        Thanks for the insight! The attorney is one of your favs, Z&S (abbreviated on purpose). When I first received a letter from them on behalf of midland before suit was filed, I send them a debt validation letter. Got a statement in reply. So I already established dispute. Any other suggestions? Is there any case law that you personally use in these types of suits?

  20. jason says:

    I had been sued in 2002 by a collection company. I never received the summons, back then they sent it through the mail and did not present it in person. They sent it to an incorrect address that was never my legal address. So for 13 years I have had no knowledge of this judgment against me. Now that the time is up on the case I am being brought back to court to have my wages garnished. I am not able to go back and vacate the original case, they say it is past the timeframe to do so. I have lost this new case and now have to pay back the money. I have a few problems with this as you can imagine. But first off the first debt company that sued me sold my portfolio, in fact it has been sold multiple times since the first judgment against me. How can they still go after me and win after all of this? what steps do I take. The debt they say I owe is now 3 times what they say I originally owe. Also no one has provided me with any information on what the debt is or proof it is mine.

    • John Watts says:

      Jason,

      First critical question is what state is the judgment in? If in Alabama, there is no time limit on setting aside a judgment that is void for lack of service. Now you only get one shot at it so if you have asked the judge and lost then there may be no other chance to get rid of this. If you are not in Alabama, you’ll have to find out from a lawyer in your state (the state where judgment is) what the rules are.

      Second — it can be sold before the default judgment — as long as the judge gave the judgment to the plaintiff who sued you that’s fine. And then after the judgment, the judgment can be sold. Whoever has it after the judgment will have to show they are the ones that actually own the judgment.

      Third — with interest I would imagine the debt has doubled or more since the original judgment. In Alabama judgments use to be at 12% interest so they doubled every 6 years. A while back that was (sometimes) lowered but still 13 years will make the amount much larger than the original judgment which was likely much higher than the amount of the debt.

      Here’s my suggestion — get with a consumer protection lawyer in the state of the judgment ASAP to see if you still have options to set aside the judgment. We have set aside judgments from longer ago than 13 years — there is no time limit in Alabama IF you were not served. Being served is critical to know.

      Best wishes and you can reach out to us if Alabama is the state of the judgment — 205-879-2447. We can’t help if you are not in Alabama.

      Thanks

      John Watts

  21. Michelle says:

    Hey John, I just watch your video. I’m being sued by Midland and I didn’t do anything in the fourteen days and now I have a default judgement against me. I don’t recognize the company and I don’t owe them, so that’s why I didn’t reply to it. So, how can I handle this?

    Thanks
    Michelle

    • John Watts says:

      Michelle,

      You need to act ASAP as you have a limited amount of time to ask the judge to set aside the judgment or to appeal it. If you are outside of AL get with a lawyer in your state.

      If you are in Alabama, call us immediately and ask for Carolyn. Give her the case number and the name you were sued under and she’ll look up the case for you and see what we can do to help you.

      Thanks

      John
      205-879-2447

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