How Can You Fight Ghost Debt?

Midland, as we have discussed, is a common junk debt buyer, recently called a ‘ghost debt‘ buyer. They buy defaulted debt for pennies on the dollar. They then try to collect the full charged off balance adding fees and interest along the way. They will send letters to consumers demanding payment and will sue those consumers many, many times, because as the above brief correctly points out, the odds are very good the consumer won’t fight back.

So, what can you do against a junk debt buyer?

1. First keep everything they send and if legal in your state record all phone calls.

2. Don’t be intimidated. Remember this is a civil matter and not a criminal case.

3. If you do talk to any debt buyer on the phone and you get nervous or don’t know what to say, hang up. They called you, you are under NO legal obligation to speak with Midland Funding LLC, NONE AT ALL. It does not matter if their letters say it’s urgent you contact them.

4. Don’t admit to anything. You can settle, if you wish, at a later time.

5. Never give your banking or credit card information to them over the phone.

6. Send a DV letter to Midland and send it certified mail.

This is the best DV you can send.

Dear Midland,

I reference to the alleged account and debt reference in your letter to me dated XXXX, please be advised this debt is disputed in its entirety and debt validation is requested.(if you don’t want calls you can add that language also).



That is it. Keep in mind that all buyers of junk debts, buy law, does not have to provide you with document or answers you demand. There is no legal basis for the letters floating around the internet that tell you to throw everything but the kitchen sink out there and demand that they provide you everything under the sun.

7. While the DV letter is pending, study. Don’t wait until they answer the letter or sue you to start learning. Use this time to learn the process.

8. Be patient. Time is on your side. Everyday the ghost debt buyer does nothing is a day in your favor. Over time records get lost (not that they will have any usually), employees move on, attorney generals sue Midland making their accounts null and void in some cases, and you move a day closer to the statute of limitations expiring.

9. Finally, keep in mind, that once you send your dispute/DV letter and they respond, there is really nothing for you to do, other than study. There is an excellent chance, a few months later, you will get another letter from a different JDB starting the process all over again.

That means Midland did not want to mess with you and sold the debt to another JDB. This is wonderful for you. This goes back to standing. Another link in the chain of custody has been added.

What if you’ve found our site because you’ve already been sued?

1. Read the rules of civil procedure for your state. They are your play book and will govern what you can and can’t do and what you must do.

2. Stay calm and ask questions, but read the threads people post links to. Remember posters on this board are from all over the country, so the opinions given are general in nature, for the most part.

3. Answer the lawsuit !!!! They win automatically if you don’t.

4. Don’t use affirmative defenses unless you know they apply to your case and you know how to argue them.

5. Start the litigation process and make lack of standing your prime defense.

If you’ve been sued, they are not going to drop the case until you give them a reason to drop the case. A good reason to drop the case is an aggressive defense.

6. You can look into arbitration, especially on the lower amounts being claimed. Midland buys the arbitration clause when they buy the account. Linda7 is the resident expert on arbitration. I’m not a big fan of arbitration in JDB cases.

I want those strict rules of procedure and evidence in my corner, but I won’t for a second say arbitration has not worked for a ton of people, in getting cases dismissed.

Finally, remember there are literally tens of thousands getting the same letter, phone call, or letter you just received. You are not their only case and you are just a dollar sign to them. You have time (unless you come in here the day before the lawsuit answer is due) so releax and read all about JDB.

This is very important and why I am saying this as the close again. Keep in mind that this post concerns Junk Debt Buyers and mostly major credit card companies like Capital One, Citibank, Discover, Chase are not junk debt buyers. The DV process does not apply to original creditors, and generally speaking an original creditor can meet their burden of proof regarding standing.

Real World Examples Of Fighting & Beating Ghost Debt Buyers

Here is a wonderful brief in support of a consumer that was fighting a ghost debt buyer. The consumer did win.

The brief is filled with additional case law that is very favorable to the consumer. Here is one such part of the brief in describing to the court how ghost debt buyers operate with their lack of standing.

Taken from this brief to the Missouri Supreme Court (Remember this consumer won using these arguments)-

“Proving ownership is more than a mere technicality. There is good reason to hold
debt-buying plaintiffs to their burden to prove standing with reliable, complete evidence
supported by a sound foundation. If firms do not establish proper ownership of a debt, as CACH failed to do in the case at bar, great harm can come to consumers.”

“Finding that CACH had established standing to sue without sufficient evidence
lends itself to abuses in the debt buyer industry by subjecting Askew and other consumers
to duplicative judgments on a single debt. This practice pervades the entire debt buyer
industry because it is an inevitable result of the debt buyer business model. In this case,
if CACH were able to successfully collect from Askew based on the document fragments
it submitted, there would be no protections for Askew if a true owner of the debt sought
to collect from him at a later point in time. Such lawsuits are all too common.”

Also in the same brief, here is a description of how the defense of standing against a junk debt buyer works.
They use a JDB name CACH but just insert Midland in place of CACH.

“Reported cases from around the nation demonstrate that debtors do face multiple
collection attempts or lawsuits by competing entities which lack standing. Collection
attempts by firms without standing come in many varieties. Most commonly, the debtor
pays Debt Buyer A, but then Debt Buyer B later attempts to collect. See Overcash, 549 F.
Supp. 2d at 195; Chiverton, 399 F.Supp 2d at 99; Fontana, No. 06-CV-359A, 2007 WL
2580490, at *1.

Sometimes, debtors pay Debt Buyer A though Debt Buyer A had already sold the
debt to Debt Buyer B without debtor notification. See Smith v. Mallick, 514 F.3d 48, 50
(D.C. Cir. 2008). Other times, debtors pay the original creditor prior to a debt buyer’s
collection attempts. See Assocs. Fin. Servs. Co. v. Bowman, Heintz, Boscia, & Vician,
PC, No. IP 99-1725-C-M/S, 2004 U.S. Dist. LEXIS 6520, at *5-*9 (S.D. Ind. Mar. 31,2004).

And in the same brief a general discussion on how JDB work. Remembe this was to the MO. Supreme Court and the arugments won. You always want to use your states precedent, but it never hurts to have supreme court precedent, even if from another state.

“The debt buying industry thrives by purchasing stale debts for pennies on the dollar, debts that it collects using aggressive debt collection methods and the courts. Debt buying companies choose to purchase these debts, knowing that the balances may not be accurate, knowing that it will probably not be able to obtain the proof necessary to prevail on a case at trial.

They do so because the cost is low and the chance that consumers will hire lawyers to protect their rights are low too. When a consumer does assert his or her rights, our rules of the evidence offer the only hope that the consumer will receive justice in the face of an industry known for using data and records plagued by inaccuracies.”