When some debt collection agencies buy junk debt they aim to create lawsuit intimidation among consumers
Have you ever been sued by a debt collection company and you have no idea who they are? You're not alone.
Many people who have defaulted on credit card debt or have fallen behind in student loan payments receive correspondence and are sometimes served with lawsuits from the debt collection company called LVNV Funding. Lawsuit intimidation happens more often than you think.
As reported by ProPublica, In recent months, the only real bad news for debt buyers was that local courts across the country temporarily shut down. Debt collection lawsuits provide a key source of revenue for the companies, a way to extract payment from consumers, typically low-income, who don't offer it up.
LVNV, a major debt buyer privately owned by Sherman Financial Group, filed over 2,700 suits in Maryland in August.
But now even that hiccup is over. After a bit of a lull in the spring, Encore and other debt buyers are back at it, filing suits by the thousands every week, according to ProPublica's analysis of state court filings.
In August alone, Encore filed about 1,000 suits in Indiana and over 2,000 suits in the metro Atlanta area. Other debt buyers jumped back in as well. In Chicago, Portfolio Recovery filed over 3,000 suits in July, while LVNV, a major debt buyer privately owned by Sherman Financial Group, filed over 2,700 suits in Maryland in August.
The Junk Debt Business Model
LVNV is one of the largest junk debt buyers in the country. Its business model involves purchasing charged-off consumer credit accounts from banks and finance companies (often for pennies on the dollar) and demand the full amount it claims is due.
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While any lawsuit can be intimidating, being sued by a debt collection agency can be especially intimidating. They often threaten wage garnishment. Many junk debt buyers have an expectation that the consumers they sue will fail to answer or show up to court — which actually happens a large percentage of the time. If that happens, they will be granted a "default" judgement which allows them to pursue wage garnishment.
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How Can You Protect Yourself?
The best way to protect yourself when you get served with a lawsuit from LVNC Funding is to push back by responding to the lawsuit. Typically, junk debt buyers like LVNV Funding will not have the proper paperwork to prove their case against you.
Attorney Ryan Peterson has spent the past six years representing consumers against banks and debt collectors, including LVNV. Some defenses include LVNV's inability to prove it's the rightful owner of the account, its failure to produce or authenticate the original creditors' billing statements, or its lack of proof that the account belonged to you in the first place. So if you need a debt collection attorney in Minnesota, give us a call.
“I have a 100% success rate in getting these lawsuits eventually dismissed,” says Peterson.
If you receive a notice from a debt collection agency or have been named in a lawsuit by LVNV Fudning, push back. Call Peterson Legal at 612-367-6568 and talk with Ryan Peterson to find out your options and the best course of action.