The HuffPo headline certainly is a bit misleading – “Debt Collectors Have Figured Out a Way to Seize Your Wages and Savings” – if only because it isn’t news. Debt collectors have been doing this, more or less, practically since the day of modern debt collection, which is to say a very long time. Hunter Stuart, writing for HuffPo, is simply talking about default judgments.
A default judgment, in the most general terms, is where you fail to show up to court, and the other side takes advantage of that failure by getting what they asked for in the lawsuit. A default judgment in the hands of a debt collector is like a weapon. The collector can now seize wages and savings, as the HuffPo headline says.
To be fair, using a heavy default judgment strategy is a relatively modern phenomenon, at least in this flavor, where debt collectors employ what’s known as “robo-signing” – the automatic signing of thousands of documents in lawsuits without verifying whether the information alleged is correct. In that sense, as long as there is robo-signing (and there is evidence that there continues to be robo-signing) there will be a way for debt collectors to obtain more default judgments.
A default judgment is often the end of the road for debtors. Judges are not likely to toss them out, unless there is a good enough reason to do so. One reason might be that the debtor never got notice of the lawsuit in the first place, even though the debt collector claimed that it sent notice. Another might be that the debt collector sent the papers to the wrong person, or that the person never owed any debt to begin with.
In any case, it often takes good old fashioned lawyering, in the form of strong debt settlement negotiation or other action, to make the problem go away.
Read the article:
The Default Judgment Strategy Among Debt Collectors