Debt buying companies make lots of money preying on debtors whose delinquent accounts have been charged off by original creditors. They sue people for the full amount of the debt that the consumer owed his or her original creditor, even though the debt buyer paid a cheap price for the rights to sue on the account. How cheap? In many cases, debt buyers pay virtually nothing for the accounts they buy. While the rumors abound as to how little they actually pay, rest assured that it is not very much. I have heard that if a debt buyer pays 12 cents on the dollar for a batch of accounts, they got a “bad deal.”

In our line of work, we see some repeat offenders. Some of the bigger, more nationalized companies sue thousands — perhaps tens of thousands — of debtors per year. These are some of the biggest:

— Midland Funding, LLC

— Equable Ascent Financial, LLC

— Asset Acceptance, LLC

— CACH, LLC

We see massive filings of lawsuits across the state of Texas from these companies. In Collin County, for example, Asset Acceptance filed 19 lawsuits during the month of October, 18 in December, 12 in January, and 12 this month. Midland Funding filed at least 86 different lawsuits in the Denton County court system during the last three months of 2011.

If you are “working” with one of these companies, getting annoyed with their collection efforts, or even getting sued by one of them, you need to understand how they operate. These companies work from a global perspective, dealing with millions upon millions of dollars in charged-off debt and hundreds of thousands of consumers across the nation. You are but one in a million. You are definitely not alone.

Probably because you do not know what that means.

Whenever a civil lawsuit is filed, the plaintiff wins the case by obtaining a “judgment” against the Defendant. A “judgment” is the final determination by a court of proper jurisdiction of who wins the case. Sometimes, after a creditor files a civil suit to collect money from you, they will ask if you want to settle the debt by entering into an agreed judgment. An agreed judgment is as good as a regular judgment — except, of course, you have agreed to it. An agreed judgment, like a regular judgment, resolves the lawsuit.

The difference is that there is typically a settlement agreement that goes hand in hand with the agreed judgment that stipulates that you are to pay the creditor a certain sum, X, in order to satisfy the judgment amount, Y. By the completing the payment amount (or settlement amount), X, the creditor agrees that you will have satisfied the judgment amount, Y. In exchange for your promise to pay the discounted amount, X, the creditor promises not to “execute” or act upon the judgment, i.e. initiate bank account garnishment or seize nonexempt assets.

The danger in agreed judgments is that if you default in making the payments, the creditor, according to the terms of the settlement agreement, has a judgment against you for the full judgment amount, Y (minus payments that were made towards it, of course).

My perception of debt and human nature has been forever changed by representing the plight of those who society has forgotten: the debtor.  There is such a stigma against someone who owes money and typically it is the debtor, himself (or herself) who applies the stigma.  It is this very stigma that keeps debtors from taking action against those who break the law.  They feel that they do not deserve help or that the problem is one of their own making.  Guilt takes over.  Many times even when the debtor is sued, they do nothing because they feel that they deserve some sort of punishment because they were unable to pay their bills.

I have seen over the years, that debt is not created out of frivolity but rather out of necessity.  In an overwhelming amount of cases that I see, the debt was created because of  bad event: illness, job loss, divorce, etc.  Moreover, people defaulted on the debt because of another bad event.  As a result, the debt bears a baggage of the emotional situations that created the debt and then defaulted the debt. Every phone call and every letter reminds a person of the emotional situation that started this cycle.  It is for this reason, that laws exist to protect consumers from harassment.

I am constantly asked by other lawyers about how I sustain financially a dedicated consumer practice that focuses so predominately on defending people when they are sued over a debt. My response is simply that somebody needs to.  These types of cases have grown more difficult over the years, requiring more work and more risk. My clients have taught me so much about how there are good people in this world and those good people are just trying to make it from point A to point B.  My cases are not about getting someone out of there debt, but rather about moving someone down this roller coaster in such a way that no matter the outcome, they don’t harbor any additional regret.

I strongly believe that our judicial system should be available to the individual and that the system should not apply different standards for a debt case than it would over companies battling over millions.  The evidence rules are the same.  The procedure rules are the same.  The law is the same. Therefore, the attention and justice should be the same. Yes, my clients owe money but that does not mean that a creditor is automatically entitled to the judgment.