We review hundreds of lawsuit cases per year where Midland Funding LLC will sue an individual for unpaid debt. Actually, based on our internal data, Midland Funding LLC is one of the most litigious of the creditors out there, and that is the reason we are writing this article to provide insights as to who Midland Funding LLC is and provide insight if you have been sued or if you just received a letter that Midland Funding LLC is now handling your debt.
Many creditors will set a limit as to how much they will sue for, but Midland Funding LLC does not seem to set as high of limits on how much you owe. In fact, we have seen Midland Funding LLC sue for only a couple thousand dollars. As such, it’s important to understand how this firm works, so that you can be prepared.
Who is Midland Funding LLC?
You may have received a collection letter and are asking yourself, “Who is Midland Funding LLC?” Midland Funding LLC is part of Encore Group, which is a publicly traded debt collection firm. There are three main entities to Encore Capital Group, but the most common we see are Midland Credit Management and Midland Funding LLC. The third is Atlantic Credit and Finance. There are some differences between how these firms operate. We plan to do a separate article on Atlantic Credit and Finance.
Midland Credit Management (MCM) is a licensed debt collector that works with consumers to resolve past due obligations. MCM services accounts after the original creditor has charged off the account. Accounts are often considered charged off when the account is 120-180 days overdue without payment. MCM will work with consumers for a payment plan, discount or a custom solution to resolve the debt.
Midland Funding LLC is one of the nation’s largest purchasers of unpaid debt from some of the nation’s largest lenders. From my experience, Midland will purchase debt from such finance institutions as Barclays, Synchrony, Chase, and Citibank. Midland Funding LLC is generally the entity that does the majority of the suing. This is necessary to understand when you are dealing with either Midland Funding LLC or MCM.
Why does some debt go to Midland Funding LLC other debt go to MCM? This is unclear. Our hypothesis is that Midland Funding LLC has a multi pronged strategy when deciding whether to sue:
- Are you in a state that allows wage garnishment, liens and levies (i.e. are they going to be able to enforce a judgement against you if they win a judgement)?
- Are you able to make a payment, but are unwilling to do so (i.e. there are payment propensity scoring systems that will state that person x has a higher percentage to pay than percentage y)?
- What is the cost / benefit analysis of the lawsuit (i.e likelihood of a win (do they have good data to validate the debt), how much debt is owed, unrecoverable court costs if they lose)
- How old is the debt? Is it near the statute of limitations?
We use this information to determine our own negotiation strategy.
I’ve been sued by Midland Funding LLC. What do I do?
Midland Funding LLC is one of the most litigious creditors that we come across, so we also know that they will often work with you. Let’s go through the process.
A debt collection lawsuit generally begins when the creditor files a complaint with the state civil court and lists you as the defendant. The complaint provides the reason why the creditor is suing you and what the creditors want to obtain in payment. Oftentimes this includes the money you owe plus interest, potentially late fees, the attorney fees and court costs.
The attorney representing the creditor or the creditor themselves will often notify you of the lawsuit by serving you. This means that a copy of the complaint and court summons is delivered to you.
With a default judgment, the creditor may do the following based on the state that you live:
- Attempt to freeze money in your bank account
- Put a lien on your property that you own
- Garnish your wages
This is why it’s important to respond to the summons as many creditors (including Midland Funding LLC) will work with debt settlement firms and consumers when suits have been filed.
When this happens you will want to gather as much information on the debt as possible. Oftentimes, as with Midland Funding LLC, the entity suing you is not the original creditor.
Review your own records and determine:
- Whether you received a validation letter
- The amount Midland states you owe is accurate and whether you owe the debt
- Whether the debt is past the statute of limitation for your state. Don’t know your state’s statute of limitations? Feel free to reach out or search for that using your search engine.
There are alternative options you can do when Midland Funding LLC sues you, in addition to responding to the lawsuit.
Handling the Midland Funding LLC lawsuit:
The first thing to do when you get sued by Midland Funding LLC is to determine whether you owe the debt.
If you owe the debt:
When you owe the debt, we generally state to either contact a debt settlement firm to contact the creditor to see whether the firm will negotiate or attempt to negotiate yourself. Take a look at your total debt owed as there may be a likelihood that other creditors will follow with their own law suits, so have someone who understand the creditor lawsuit risk review your credit report or data for you.
- Look at your complete debt picture to see whether you should attempt to settle the debt or whether to pursue another option. If you get sued and settle one debt, do you have other creditors that will also sue because you just settled the previous debt?
- See whether a payment plan can be arranged that is affordable with your budget.
- Negotiate for less debt than originally owed. Make sure that you have the settlement offer in writing.
If you do not and cannot have money to pay the debt, this is also a good use case to speak with Midland Funding LLC. I can help with that conversation. If you need to buy time to get the money together to attempt to settle, you can also file the reply to the case. Rest assured that we have had a great success in this area or we can point you in the right direction if we are unable to help. Feel free to write me directly if you have any questions about which option to pursue.
If you don’t owe the debt:
- If you have adequate information showing that this is not your debt, you may want to fight it. This is essentially telling the creditor to, “Prove that I owe the debt”. The burden of proof lies on them. If you do not owe the debt, then this may not be a difficult case.
- The contract that you signed was illegal or that you signed it based on false information. You may want to see outside assistance to determine if this your case.
In this case, you may want to have a free consult to speak with a reputable debt collection attorney about your options. If you do not know a reputable debt collection attorney, you cannot afford one, or if you want to represent yourself, please feel free to write me directly for more information.
A couple things to note:
- If you are able to negotiate a settlement with the debt collection lawyer, get everything in writing. Many creditors will have you sign something that states that if you do not follow through with the payments that a judgement will be forthcoming, so that is important to note.
- Once the debt has started to go through the process a lawsuit has been filed, so there is an outstanding case against you. The discount will generally be lower than attempting to settle the debt before the case has been filed. It will be unlikely to get a 50% discount.
Midland Funding LLC Common questions:
I have been sued by Midland Funding and may be able afford to settle my debt. Should I try to settle my debt?
I know this may sound counterintuitive, but it depends. Let’s say you have $100,000 of unsecured creditor debt outstanding that is within the statute of limitations. Let’s say creditor A sues you for a $10,000, and you are able to settle for $7500. Let’s say that creditor B sees that you have settled for that debt and decides to sue you as well. You can see how this can eventually push you to bankruptcy.
Before you attempt to settle, my advise is to find someone who can review your credit report and do an analysis of who your creditors are in order to see whether you should settle and the plan of attack you should have.
Also, I advise everyone not to pay for a credit report when the government allows you to get a credit report from the 3 bureaus for free each year. Here‘s the government website that indicates that information, and here‘s the website where you can access your free credit report, authorized by federal law.
I have been sued by Midland Funding and cannot afford to pay the debt. Should I file for bankruptcy?
It depends on numerous factors. Do you see that you will not be able to afford it in the near future or do you just need time to afford the payment? Can you sell something to afford the debt? These are important questions to determine whether you should file for bankruptcy or try to settle the debt.
We built two calculators to help go through the process with you. First, we built a Chapter 7 Calculator to determine whether you qualify for Chapter 7. Second, we built a Chapter 13 Calculator to estimate your plan payment for a Chapter 13 bankruptcy.
If Midland Funding LLC is able to obtain a judgment, will they be able to garnish my wages?
This is situational from state to state. We wrote a detailed article to provide insights for your state. Alternatively much of this information can be found by performing searches using your search engine in your browser.
Midland already received a judgment against me. What can I do?
In this case, it may be more difficult to negotiate with Midland, but that is dependent on such things as whether your state allows wage garnishment or whether there are opportunities for levies or liens against an asset.
There are many times where Midland Funding LLC will be able to obtain a judgment without your knowledge. Say for example that you were not able to receive the court summons. The creditor in this case may ask the judge to have a judgment passed to them regardless of whether you received the summons or not.
What can I do to resolve debt with Midland Funding LLC if I haven’t been sued?
Midland is in the habit of settling debt via a payment plan or a lump sum payment. You may be thinking that it’s not possible to come up with a lump sum payment to settle that debt. That’s completely understandable.
We work with Midland Funding LLC to negotiate flexible payment arrangements that work for both the consumer’s finances and for Midland Funding LLC. You also may be able to avoid a future lawsuit if you are able to get a structured settlement plan in place with them today. Feel free to contact us directly with any questions for how this may work your your budget.
I do not believe I can do this on my own. Can you help?
Absolutely, we are experts here to help. Ascend is in the business of helping people resolve his/her debts through payment plans and one-time payments. Our conversations and emails are always free, and we will never move forward to offer our services unless we believe it is best for your situation.
Will Midland delete paid debts from my credit report?
Midland has some of the most advantageous process for consumers when it comes to paid debt and your credit report. This is referred to as “Pay to Delete”, and here’s a summary of Midland Funding LLC’s policy at the time of this writing:
For accounts Midland is already reporting on, Midland will stop credit reporting on accounts that are BOTH:
- Paid in Full for less than full balance OR Paid in Full
- More than 2 years old based on the time since the date of the delinquency.
For accounts Midland has not yet started reporting on, Midland will not credit reporting on accounts that are BOTH:
- Payments begin with Midland within 3 months of the mailing of Midland’s initial notice
- Payments are made each calendar month after until account is Paid in Full less than full balance or Paid In Full.
We appreciate Midland’s more pro-consumer stance on credit reporting regardless of how litigious the firm can be. Drop me a note if you have any questions.