Hundreds of thousands of consumers each year are sued by debt buyers and often, judgments in favor of the debt buyer receive a “rubber stamp.” Because consumers aren’t aware of their rights, aren’t properly served, can’t afford to hire an attorney or perhaps have just given up, they don’t appear in court and end up with a judgment against them by default. Now, this phenomenon is getting some much needed attention. On January 20, Human Rights Watch published “Rubber Stamp Justice; US Courts, Debt Buying Corporations, and the Poor.” https://www.hrw.org/report/2016/01/20/rubber-stamp-justice/us-courts-debt-buying-corporations-and-poor
The article is a must read and explains that debt buyers are purchasing vast portfolios of bad debts from lenders who already charged them off. Debt buyers purchase these debts for pennies on the dollar but sue consumers for the full amount of the debt plus interest.
Leading debt buyers rank among the heaviest individual users of state court systems across the US, and various legal actions and research, including that of Human Rights Watch, have identified repeated patterns of error and lack of legal compliance in their lawsuits. These problems are often discovered long after the debt buyers have already won court judgments against alleged debtors, a situation that arises because of the inability of alleged debtors to mount an effective defense even when they are on the right side of the law. Debt buyer lawsuits typically play out before the courts with a stark inequality of arms, pitting unrepresented defendants against seasoned collections attorneys.
While this does not mean that “debt buyers and other creditors should not be able to enforce their claims in court, … it does mean that courts have clear and compelling reasons to handle debt buyer litigation with a particular degree of vigilance.” Because debt buyer lawsuits are often generated and filed by automated processes, they should be more thoughtfully examined by the courts being asked to render judgment.
If you have been sued by a debt buyer, don’t ignore the paperwork. Call an attorney to assist you with a defense or visit the Clerk’s office of your local court. There are often courthouse help desks that can provide legal assistance or counseling.