On December 12, 2012, Minnesota Attorney General Lori Swanson announced a $500,000 settlement with debt collection firm Midland Funding, LLC, for alleged robo-signing practices. The lawsuit leading to the settlement, "is believed to be the first government suit against one of the [debt collecting' firms." Although the firm admitted no wrongdoing in accepting the settlement, one witness testified that $9,000.00 had been garnished from her account based on a debt from someone else's credit card.
Firms like Midland often buy debt for pennies on the dollar and then attempt to collect full (or substantially full) payment from debtors either through collection calls or, eventually, a lawsuit.
Reports came out earlier this year shedding light on a practice taking place all around the country: district attorneys allowing use of their letterhead for debt collectors attempting to collect on bad checks. In California, collection agents can even compel debtors to pay for a financial responsibility class--with proceeds shared by the the district attorney's office and the collector/creditor. Although in most circumstances the facts will not be reviewed by a DA to determine whether a crime was committed, the collectors nonetheless have been known to threaten debtors will jail time. Consumer advocates see this as a troubling development, though the DA's offices maintain that it is just a more efficient way of letting merchants collect money and of resolving matters without involving prosecutors unnecessarily.
The newest iteration of the Occupy Wall Street movement is the so-called 'Rolling Jubilee'--an organization that buys up consumer debt from the original creditor for pennies on the dollar. Instead of starting aggressive collection efforts, as most debt collection agencies that purchase such debts would do, Rolling Jubilee forgives the debt. Some have expressed concerns that tax consequences associated with debt forgiveness are not sufficiently publicized in the organizations mission.
In a recent sentencing hearing for missed child support payments, Wisconsin father of 9 Corey Curtis (fathered among 6 women) was ordered "as a condition of probation, to not procreate unless he can show he can financially support the child." The man owed nearly $100,000 in missed support obligations.
Have you not received child support or spousal maintenance payments due to you under a court order? A judgment can be docketed without initiating a lawsuit. The debtor parent/spouse is given an opportunity to contest the claimed obligations through a hearing, but if they cannot demonstrate that the obligations were paid (or were not due in the first place), then the judgment stands. Once a judgment is obtained, you can garnish either their bank account or paycheck to get back the money owed to you.
For more information contact Attorney Caitlin Guilford:
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