Sewer service, according to Patrick Clark with Bloomberg Businessweek, is when debt collectors never actually serve the people being sued with the lawsuit papers.
So the folks being sued don’t know they’ve been sued.
Then the debt collectors go to court and get default judgments because the folks being sued (consumers who are alleged to owe debt) never knew they were supposed to show up in court on such-and-such a date to defend themselves.
And with default judgments in hand, debt collectors now have even more leverage in getting paid.
To be fair, sewer service doesn’t happen in all cases. It doesn’t appear to be standard practice. But it also appears to work from time to time, enough that some debt collectors (or anyone else who wants to sue someone) might be tempted to give it a shot.
To back this statement up, let’s look at Clark’s quote of former debt-collection agency owner Michelle Dunn: “The courts are so backed up already, and there’s really very little sympathy.”
So what’s a consumer to do?
Once you’ve got a default judgment against you, it gets tougher to dispute the debt. (Although that doesn’t mean you’re totally out of luck.) There are, for example, debt settlement options that could put you in a better financial position.