Debt Collection Lawsuits “Roaring Back,” Report Claims

A published report details the increasing number of lawsuits that debt collectors and debt buyers are filing against individuals who have outstanding debts. In New York, for example, the number of cases filed against individuals with unpaid debts has grown to 76,000, up from 47,000 just two years ago. Those numbers fall way behind the 300,000 which were filed back in 2008, according to a published report.

The report looked at a judgment obtained by Encore Capital against a 60-year old grandmother in Brooklyn, who was never properly served with court papers when she was sued more than a decade ago. A default judgment was obtained when the woman did not appear for her court date and her paychecks have recently started being garnished to repay the judgment.

A decade ago, the New York attorney general’s office had to crack down on what is known as sewer service, where a process server lies about serving an individual with lawsuit paperwork. The AG’s office said back in 2009 that it found more than 100,000 judgments that were likely improperly obtained because the defendants were never served with their paperwork.

The number of lawsuits filed against individuals is increasing because individuals are not responding to calls or letters from collection agencies to pay their debts. Lawsuits are usually a last resort for collection agencies, and suits are only filed when the agency thinks that the defendant has money to pay the debt. Jan Stieger, the executive director of RMA International, is quoted in the article, saying, “”There’s an industry saying: ‘You sue the won’t pays, not the can’t pays.'”

After proving that the process server filed a false affidavit in her case, the Brooklyn grandmother’s debt was vacated by a judge.


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