Legal Question in Credit and Debt Law in Georgia

The short Answer to your question is YES! You have file an Answer. But there are very important defenses and counterclaims that must be included in the pleading or you may waive them.

Midland is a debt buyer/ debt collector, and because in my opinion it does not have a valid and complete chain of assignment, my firm's policy is that we don't pay debt buyers. Therefore, our client's fight these alleged debts until they prove that they are the real-party-in-interest.

If you'd like me to take a look at your case, please feel free to visit our website at kaidenlaw.com and contact me directly at 770-801-9950. I am a Georgia consumer lawyer.

You have been sued. You have a legal emergency. If you do not file an answer within 30 days, you lose, and you can be assured that folks like Fred Hannah will promprly then garnishee your wages and bank account. You may also have defenses you can raise in a case. Those are waived if you do not file them in time.

Usually in these cases you have two options (be aware that if you settle for less than a dollar on the dollar, you will get a form 1099 and owe extra income taxes next year).

Fred Hanna is a very aggressive debt collector. If you Google his name you'll find many posts about him, some very unflattering. You will also find a lot about Midland, which buys debts. Sometimes those purchases may be suspect. But you have rights, and if you act within the 30 day window, a lawyer can help you. Calling the other side (Hanna) is NOT usually a smart move.

One is to file bankruptcy. If you have lots of debt, this may be the fastest and cheapes route.

One is to pay a lawyer to defend the case. Since the amount is not huge, and I don't yet know what defenses you may have, it is hard to fully advise you.

Feel free to call me at 404 768 3509 and we can set up a time to determine what you should do, as to this (and any other) debts you may have.

Wayne.

Midland Credit is a junk debt buyer. They bought the account. I have dealt with both Midland and Frederick Hanna many times.

You have been sued. You have several options, but will work for you depends on your situation.

(1) Bankruptcy is a really drastic option and unless you have a lot of other debts, I would not consider it if this is the only debt.

(2) You should only answer the complaint if you have a valid legal defense. Answers have to be filed within 30 days after you received the complaint from the sheriff or via mail. Generally, valid defenses are: (a) the statute of limitations; or some other ground - pertinent documents are not attached to the complaint, the wrong party has been sued etc. If none of these apply to you, paying a lawyer to draft an answer is not a productive use of your funds.

(3) Settle the debt. Debts can be settled at any time - before, during or even after judgment. You say you can get up $500. That is not going to cut it. Most creditors will settle for between 50% and 80% on average. Midland will take 45% - 50% before litigation, moroe like 60% after a lawsuit is filed. In such case, you can do the following: (a) either work out a payment plan (on your own or with a lawyer). You will have to pay the FULL debt and can make monthly payments of about 2% to $% of the debt. This is not my favorite option. (b) You can settle the debt. Start saving up as much as you can. Hanna is aggressive. Once judgment is entered, they can levy on your bank account or any other assets owned free and clear and they can garnish your wages. There are limits as to what they can garnish and if there is already a garnishment in place (like for child support) then there can be no added garnishment If you co-own a house with someone, is there a mortgage/deed of trust on it? Assets that are encumbered may be safe (depends on their value and how much equity you have). Is the car owned free and clear?

What I would do is try and save as much as possible. They can do nothing until 30 days after judgment has been entered. If you can scrounge up at least 50% of the debt by then, I would suggest getting a lawyer and having them negotiate a settlement for you. If Midland wants moree than 50%, maybe they will allow you to pay with what you have saved as a down payment and the rest in 1-6 installments. If not, keep saving and try again.

Regardless of what attorney you use, don't do this alone and don't just ignore the lawsuit without having an attorney review it. While any attorney here can make suggestions, without seeing the lawsuit and knowing all the circumstances the advice could change.

One caveat about settlement. Yes, it is true that if a creditor settles for less, then sometimes a 1099 is issued and you will have to pay tax on any amount forgiven that is over $600. If you settled for $1500, that means you might pay tax on $1500 (I am assuming, to keep it simple that the debt would be for $3000). However, if your other debts outweigh your assets, then you can exclude all or part of this amount from taxation. And even if you had to pay taxes, paying taxes on $1500 (or whatever amount is forgiven) is still better than paying the full sum that is owed.

Regarding assignment of the debt, I am not as prepared to state that Midland does not have the right to collect the debt. Proof of assignment does not have to be attached to the complaint. While you can demand it in discovery, this requires you to hire a lawyer and prepare an answer and engage in discovery. Let's face it - if you had these kinds of resources, you may as well just settle the debt NOW. And you run the risk of irritating them if you make them jump through all the legal hoops. Sure, you can do that, but there is no law which requires them to resolve the debt. So if you make them produce the evidence and they prove that you are liable, then they can make you pay the full balance owed. Is that smart?

I am not a litigator or a bankruptcy attorney. My focus is on helping clients resolve their debt, outside of court, for an affordable fee. Litigation has its place, as I said. However, most debtors do not have valid defenses and it is only in the rare case where they do which would make it worthwhile to litigate.

So carefully think about your next move in light of the different perspectives offered here. If you decide to go the litigation or bankruptcy route, you have plenty of local attorneys to choose from. If you are interested in resolving your debt outside of court, or would like to discuss the specifics of your case in confidence, I give free email consults and can offer better advice as to what you ought to do in this case. Please contact me at [email protected].