When being faced with a Midland Funding lawsuit, the first question that typically goes through most consumers mind is “who is Midland Funding?”. If you have been served by a court and thought of this question, you are not alone! Many consumers first encounter with Midland is when being served by the court for a Midland Funding lawsuit. The remainder of this post explains who Midland is.
Who Is Midland Funding, LLC?
Midland Funding, LLC is a company that buys accounts in default (also known as bad debt). A consumer credit account typically goes into default and is charged off once it has been 180 days since a payment has been made. These accounts are typically consumer credit accounts such as credit cards and store cards. Midland purchases these accounts in groups and often only pays pennies on the dollar to get them. Midland Funding is what is called a 3rd party debt collector. This means that they never originally owned any of the accounts that they try to collect on and instead Midland relies solely on the portfolios of debt they purchase to turn a profit.
Midland Funding typically uses a sister company called Midland Credit Management to begin collecting on the accounts purchased by Midland Funding. Both of these companies share the same parent company, Encore Capital Group.
Why Does Midland Buy Old Debt?
Profit! Midland’s end goal is to make money like most businesses. Midland, however, is a bit different in their business model. Midland Funding does not make a product to sell or open accounts directly to consumers like an original creditor. They buy other companies defaulted accounts so that they can try to collect the money and keep it for themselves as profit. Midland does not just buy one account at a time. They buy massive portfolios of consumer debt-originating throughout the United States-for pennies on the dollar. Midland’s parent company even describes Midland as one of the nation’s largest purchasers of unpaid debt. Simply put, Midland bought an account they allege was originally between you and another company and is trying to turn it into profit.
I have A Midland Funding Lawsuit. Why Are They Suing?
They are suing because they claim that one of the many accounts they have purchased belongs to you and you therefore owe them now, not the original creditor. They are trying to get you to pay them the alleged amount or have a court enter a judgment against you for the alleged amount. When you boil it down, Midland is using the court system as a tool to ensure their return on investment for the account they claim is linked to you. They typically will also send letters offering to “settle” the alleged debt for 70-80% which is likely far more than what they paid for it.
Can You Successfully Defend Against A Midland Lawsuit?
Absolutely. Midland is required to have evidence that shows the court:
- There was a valid agreement between you and an original creditor;
- The terms of the agreement (interest and fees);
- The source of the amount alleged (payments and credits as reflected through account statements);
- That the account was charged off; and
- Midland legitimately purchased your specific account and has legal standing to sue you.
The volume of accounts that Midland purchases from original creditors tends to work against them. Midland is often unable to prove with legal sufficiency that they purchased your account and that they have legal standing to sue you. This is where an experienced attorney can be the most beneficial to you. An experienced attorney knows what Midland’s attorney can and cannot submit to the court, how to object to evidence not allowed and how to show that Midland’s complaint is legally deficient. Starks Law can do all of this for you while you likely NEVER have to see the inside of a courtroom. Give us a call today and let’s talk about your situation.