Short answer
Midland Funding LLC buys defaulted credit card debt and Midland Credit Management collects it. Both are part of Encore Capital Group. The cheapest time to resolve one of these accounts is early, before it reaches a collection attorney, and acting early can keep the account off your credit reports altogether.
Key points on this page
- Midland Funding is the debt buying arm. Midland Credit Management (MCM) is the collection agency. Same owner, different jobs.
- Resolve the account soon after Midland buys it and they may not report it to the credit bureaus at all. This offer is real, and few other collectors make it.
- Midland removes its credit reporting once you pay or settle. Deletion has been seen to take up to 60 days.
- A “Pre-Legal Notification” letter is not an empty threat. It means your file has been selected for collection attorney placement, and you still have time to settle before that happens.
- Settling after a collection attorney has the account commonly costs 20 to 40 percent more than settling before it goes to court.
- Sending a debt validation letter is your right, but it is counterproductive when you already know the debt is yours and your goal is the lowest possible settlement.
I recently spoke with a woman who had just been sued by Midland Funding LLC for a debt they bought from Citi bank. The amount she is being sued for is a few thousand dollars. She is being sued by a debt collection attorney in her state after collection attempts were first made by Midland Credit Management (MCM). Both Midland Funding and MCM are part of Encore Capital Group, which is one of few publicly traded debt buying companies in America, and one of the largest in the world.
I want to share the facts of her situation because they may help if you are getting collection notices and phone calls from Midland Credit Management, or if you are being sued by Midland Funding. Many of you reading this can prevent escalated collections from Midland in the courts, and anyone already in the courts will want to know how best to navigate things from here.
There will be many a reader just looking for why Midland Funding is appearing on your credit reports. Once you know why Midland is on your credit, many of you will want to know some things you can do to improve your credit.
Be certain to read the updates regarding Midland Funding on your credit reports that I posted at the end of the article. They have set themselves apart from any other debt collection company in the country by developing a consumer friendly credit reporting policy.
Credit card bills that go unpaid are packaged up in large bundles and sold off to bad debt investors in the normal course of lending. A portfolio of debt being bought by companies like Midland Funding could include your account, and thousands of other unpaid credit card bills.
Having your credit card debt bought by a debt buyer like Midland Funding is not unusual. And depending on how the debt collection and debt buying landscape changes in the next year or three, it could become even more common than we see today.
Midland Funding LLC and Midland Credit Management are Different
While Midland Credit and Midland Funding LLC share the same ownership under Encore Capital, each company does something different, and those differences matter to you. Midland Funding is the debt purchasing arm, while MCM will be recognized as the active debt collection agency, similar to how you would view any other debt collector.
Midland Credit Management sent a debt collection letter to the woman I reference above. Receiving a debt collection letter from a collection company you don’t immediately recognize is a normal occurrence. Collection agency letters and phone calls are the 2 primary ways a debt buyer, or the debt collectors they hire, will try to get you to pay.
You have options for handling the collection efforts from Midland Credit. If you are in a position to work out a settlement for less than what is owed on the now purchased account, doing so after the first phone call or collection letter you receive, is something to consider.
Understand that making arrangements to pay a debt buyer the full amount for a debt they bought is not going to go to your original creditor. The debt buyer is not a lender, but an investor. They are risking money to buy up bad debt to turn a profit.
Midland Funding is willing to accept less than the face value of your debt through its debt collection arm Midland Credit Management. How much less will vary. You are welcome to call me at 800-939-8357, ext 2, in order to get help settling with them.
Midland Funding generally shows up on your credit reports. Once on them, you cannot pay Midland to delete the derogatory in the first 2 years they have your account. You can negotiate a lower payoff and Midland Funding will update your credit reports to show the account is resolved and a zero balance owed. This will help you get a home loan through, and benefit you in other ways too.
There is a delay between Midland Funding buying your debt, and them reporting to the credit bureaus. Midland Credit Management will often start off the collection process by sending you a collection notice, or make collection phone calls that you may pick up. In the letter or phone call Midland may offer you the opportunity to settle or set up payments on your account in order to prevent the credit reporting of the collection account from occurring at all. As of the most recent update to this article, you have three months from the date they get your account to take advantage of this offer. If you can afford the money to settle, or set up payments you are confident you can pay each month, there are immediate and long term benefits to doing this. It is not a trick, they actually do this, and may be the only debt collectors making this type of offer.
If you want to settle with Midland Credit Management for less than the balance owed; can afford 50%; and sometimes spread out over 24 months; click the get debt help tab at the top of this page and create your user profile.
You can get help settling with MCM and have a deal done within days (as long as MCM has not already sent your account to a collection law firm). The Network I helped build has many negotiators, and we all charge 15% of savings. No savings, no fee.
Debt Validation Request Letter Sent to Midland Credit Management
The woman I refer to in this article sent Midland Credit a validation request in response to a collection letter MCM sent her. Sending a debt validation letter to a debt collector is your right. If for any reason you question the nature of the debt being collected, requesting validation from a collection agency or debt buyer will accomplish a couple of things:
- Triggers an obligation under federal law on the part of the debt collector.
- A written response from the debt buyer should include the original creditor, the amount owed, and these days, we are seeing some form of documentation to back up their claim (not simply a reference to their own spread sheet of debts they purchased).
- Debt buyers and debt collectors do not always respond to your request for validation, but the response is often sufficient to meet the standard that would allow them to continue to collect (the federal debt validation standard is low enough to trip over, your state law standard may be a little tougher).
- Debt buyers may never respond to a debt validation letter. The account may end up with a different collection agency, or sold off to a different debt buyer (Midland has not been much of a debt reseller of late).
Midland Credit Management did not respond to her validation request to her knowledge.
It is not uncommon for a debt buyer to ignore a validation request. The reason validation of debt requests are ignored by Midland Credit Management, and other debt collectors and debt buyers, is that sometimes no meaningful information was included when the debt was purchased. There are sometimes options to acquire detailed information from the original creditor at an additional cost, but that is not always the case. And you may not appear all that collectable to a debt collector, and they just may not bother if they see a low probability that you will pay anything.
When debt validation requests are ignored, Midland Funding may still send your account to a collection attorney.
Many years ago, I came to the conclusion that sending debt validation requests to a debt collector like Midland Funding, when you already recognize the debt as yours, and your goal is to resolve the debt by settling with the collector for the lowest amount possible, is counterproductive.
Midland Credit Management Sues in Order to Collect
The woman who inspired this post next received a collection letter from a well known and very active debt collection law firm in her state. She sent a new validation request to the attorney debt collector hired by Midland Funding. The collection attorney responded to the validation request with some basic information about the original account including monthly billing statements from Citibank. Shortly after receiving the debt validation response in the mail from the Midland Funding attorney she was served with a lawsuit.
Debt buyers will target accounts they buy for aggressive collection. Midland Funding is part of the largest debt buying collection brand in the nation. Lawsuits to collect can play a big part in how a debt buyer like Midland Funding will look to turn a profit on their investment in defaulted credit card debts.
The debtor, in this case, shared with me that she knew the sister of the process server that showed up at her door to serve the lawsuit. With that connection, a friendly enough conversation took place. The process server shared the fact that she had a list of Midland Funding lawsuits to serve… about two hundred of them. She lives in a county with a small population. Two hundred or so lawsuits on debts bought by Midland Funding is not unremarkable given the amount of people there are in the area.
Midland Credit Pre-Legal Notification Letter
Update February 2023: Like many creditors, Midland Credit will often send a letter telling you of their intent to escalate collections by taking you to court. These mailed notices will typically include the words “Pre-Legal Notification” in larger and bolder letters.
A Pre-Legal notice from Midland Credit should generally not be construed as an empty threat, or just a collection tactic. They are telling you that your file has been selected for collection attorney placement, which is the precursor to a lawsuit being filed to collect. And you can prevent this.
Always open your mail from Midland Credit. If you see a pre legal notice, you typically have time to negotiate a settlement with them for a much better savings than when it goes to the attorney. The main reason I am posting this 2023 update is that I am seeing Midland send out their first collection notice, that they then follow up by sending a pre-legal notice only a few weeks later. There is often more time between their first collection notice and the legal placement letter. But they are accelerating collections with many accounts. And because they give you a timeline to resolve the debt before they take that step, your next move is important if you intend to try to settle the account
Go here to schedule a call with me to talk about settling with Midland. I can often get these accounts settled for fifty percent of the balance or lower, and the settlements can often be paid over a couple years if you need time.
I can help you settle once the account goes legal too, but the deals after attorneys get your account, or an action has been filed in the courts, are not as good, and the process is much more formal.
What to Do About Midland Funding LLC Collecting Your Debt
If you are contacted by Midland funding LLC, or by Midland Credit Management, or some other Encore debt collection brand (Atlantic Credit and Finance, Asset Acceptance), consider the following:
- Are you able to come up with a plan to resolve the debt for half of what is owed? If you can afford to settle with MCM or Midland Funding you can contact them and work toward getting a deal negotiated, a written agreement on the collectors letter head outlining the terms, and pay it off. While it is recommended to negotiate and settle with MCM or Midland Funding in a single lump sum payment whenever possible, you can also look to set up monthly payments that you are confident you can afford and follow through with to completion. Midland Credit Management and Midland Funding both offer different methods to resolve debts they are collecting while giving you time to pay.
- If you are not familiar with the debt they allege you owe, request the debt be validated. Send your request in writing via certified mail. If you do not hear back from them do not assume they went away. I do not recommend this approach if you want to resolve a debt that you know to be yours.
- Be certain you are aware of how long it has been since you last paid on the account and compare that to the SOL (statute of limitations) for being sued on your type of debt in your state. You may learn that you cannot legitimately be sued for the debt as it has passed the SOL. That does not mean the debt can no longer be collected, or that you should ignore it. The account is likely showing up on your credit report. If you have a goal of buying a home, or refinancing an existing home, you may find you are forced to settle collection accounts in order to qualify for a loan later on. And settling later on may come at a higher price. Avoid applying for credit of any nature just prior to negotiating with Midland Credit and other debt collectors (it makes you look more collectable)
Depending on your current financial situation, looking for affordable settlements and paying off debts with Midland Credit Management and Midland Funding will set you up for less stress and the ability to achieve later financial goals.
The woman who inspired this article was someone I worked with a few years ago. She was laid off from work and struggled to find a new job. She could no longer afford to make payments on her credit card debts and was referred to me by her accountant. I worked with her and her husband to develop a plan to settle her unpaid debts, rather than file bankruptcy (they had filed in the 90’s and did not want to go through that again). She was able to knock down her largest 6 credit card balances by settling with her original creditors using money she was able to borrow from a family member. Her husband’s hours were then cut back at his job, and it became impossible for her to follow through with the plan, leaving a couple of her smaller balance accounts unresolved, the Citibank account Midland Credit Management began collecting was one of them.
She did not reach back out to me for feedback on dealing with the Midland Credit Management collection letter she received. Instead, she went to the internet and found what she said was the consistent advice to send a debt validation letter to MCM. She thought the collection account was behind her when she did not hear back from MCM. When she received the attorney collection notice in the mail for the same debt, she simply repeated her debt validation request again. She did not know how, or what, to respond to the collection attorney with, once they mailed back evidence of a debt she already knew she owed. She only contacted me again after she was sued by Midland Funding.
Settling with Midland Funding LLC When Sued
I suggested she connect with a local consumer attorney about her options to handle the lawsuit. After that consultation, she decided to settle the lawsuit from Midland Funding. We got a good deal, to be sure, but she was settling on a total balance that had increased due to attorney costs. We could have settled directly with Midland Credit Management early on, and for a much better savings, and less stress.
There is, often enough, also going to be a difference between the amount you can negotiate and get approved to settle for, when you are dealing with a debt collection attorney. It is not uncommon to see a 20 to 40 percent premium to settle a Midland Funding debt once sued for collection, compared to negotiating before the account lands in court.
If you are just not in any shape financially to follow through with any strategy to resolve the debt with Midland, you may end up with a judgment against you. Judgments can be settled for less down the road, so keep that in mind. But you may want to consider defending against any collection lawsuit too. There are good resources that can help you, but you will want to assess the costs and time involved in any effort to defend collection lawsuits.
What You Can Do to Resolve Debt with Midland
You may be reading this and in a situation where you cannot possibly think of how you can resolve a debt being collected by MCM or Midland Funding LLC. I understand that. The situation is what it is, and sometimes all you can do is wait for things to improve before tackling old debts. However, you may want to at least learn about the options available to you to tackle debts Midland is collecting. You may be surprised by some of the flexibility that is available. You may even be able to avoid being sued later, by taking action today.
If you have received collection notices from an attorney for Midland Funding, or have been sued by an attorney for collection, you will want to contact the attorney directly. You should also consider speaking with an experienced collection defense attorney of your own.
If you are trying to resolve an existing judgment from Midland Funding, you have options for that as well.
There will be additional pressures on Midland Funding, Midland Credit Management, Encore Capital Group, and many other collectors and debt buyers, as a result of new federal regulatory supervision. The CFPB has already had a huge impact on Midland Funding. I will keep the article updated as things develop.
Midland Funding LLC on Your Credit Reports
I am updating this article as of 1/10/17 to include information about Midland Funding credit reporting policy changes that are way ahead of the curve when it comes to providing you the ability to meet your current and future personal credit goals. Be sure to click through and learn more about how Midland Funding will handle credit reporting when it comes to accounts you have with them.
- Midland Funding will not show on your credit reports if you are able to make payment arrangement, or settle with them for less, in the first 180 days after they purchase your account. This is obviously ideal when you can commit to resolving accounts with Midland Funding early on.
- Midland Funding will remove all credit reporting if you pay or settle a debt with them. This is an obvious benefit to those of us who had financial setbacks that lingered longer, and who could not take advantage of the opportunity to keep Midland off our credit reports from the beginning, when they sent their first collection notice.
- I have seen it take up to 60 days for the Midland Credit account to be deleted from your credit reports.
There are many examples of people in the comments below, and who I have spoken with on the phone, who are taking advantage of Midland’s credit reporting policy.
Midland Funding is leading by example with this credit reporting policy.
Updated 2/20/20 – Three additional debt buyers have since followed the example Midland set for credit reporting.
If you would prefer to get help settling your Midland Credit Management debts, let us know by scheduling a phone call using the box below, or the help tab up top. We can help you and typically for a fraction of what most companies charge.
Hi Michael,
I’m glad I found your site! I was also served with a summons from Midland and answered it. I am now required to be in court on a specific date and time for trial. Of course Midland has ignored my requests for debt validation! I have disputed the debt and I am still disputing the debt. I am in the state of Georgia and not sure how to proceed with this case. Please help!
Thanks!
Maira – Are you disputing the debt Midland is suing on because it is not yours, or more on the basis that it is sometimes difficult for a debt buyer to meet requests to prove the debt? My feedback would be different depending on the circumstances you are in. Please post a comment reply with more details.
I am being sued in California by Midland Funding for an old Chase credit card I had. I understand the statute of limitations is four years from the date of first missed payment (September 2008). On my credit report, it shows a few more months of 30 days late. Then the account was closed on December 2008 until April 2010. In May of 2009 it shows 30, 60, 90, 150, 180 again until June 2012, back to closed. My credit report shows Midland having the account starting in May 2012. After the first time I was late I did not make another payment on the account. How does an account go from closed to late again? Does this possible “reopened” account start the SOL clock again at May 2009?
Shane – Credit reporting gets goofed up, and reaging can often happen when accounts get transferred and sold. If nothing else, news about Chase credit card record keeping and data tracking over the last couple of years shows poor system maintenance and account integration.
Based on what you shared, Midland Funding is suing you on an account that is outside the SOL for California. Have you filed an answer to the complaint? If so, did you raise the SOL defense?
I did state that defense in my response. After going back and forth through the legal process with Midland, I have a court date this week. I am a little worried that the judge will see the reaging and award Midland a judgment against me. From you experience and understanding does this seem a likely scenario?
Shane – If you defend the suit as time barred due to the expiration of the SOL, and raise those arguments well, while placing the ball firmly in the Midland Funding court to prove the debt is not passed the SOL, you have a good shot at it being dismissed.
Am i able to argue this too my last payment was made on 01/04/2013 and i’m in Louisiana i was thinking the SOL is 3 years so how can i be sued now?
When did Midland Funding file the lawsuit against you in the court?
I had an Chace bank card since 1996…I was sued by Midland for 12k, In the answers, I asked that they provide me with the original amounts/balances from Chase and Midland, they were unable assumingly….two weeks after I went to pre trial, I received a letter from their Atty and the local court stating the case was “dismissed with our predjudice” it has been 4 months and I just got a letter from Midland to settle for 70% of the 12k….should i send a validation of debt letter?
kwirth – When did you last make a payment to Chase on this account and what state do you live in?
Recently I received a NOTICE TO CONSUMER OR EMPLOYEE AND OBJECTION on a case I did not know was in a court for a card credit debt. I do not recall having being served. The lawyer representing Midland Funding LLC was requesting a subpoena to one company I am having an account requesting information like work phone number, cell phone number, banking information among others. As per the information the case was open and judged in 2010 by default. Of course I was not served or improperly served and they have their default. This is water under the bridge. Question is : At this point is anything can de done. I have already asked for documentation proving my debt on certified mail. To squash the subponea I only have 5 days since the letter was received only 11 days before the date that Midland Funding is seeking to request examination of my records. Please let me know
Antonio – You should really look to get advice from an experienced debt collection defense attorney in a situation like this. General information cannot replace what you need to know about your state laws and local court rules.
Generally speaking: The debt collector attorney is looking for ways to get paid on the judgment from 2010. Asking for documentation proving a debt would have been timely either before you were sued by Midland, or through the court process, but before a judgment. I realize you were not ware of the suit, so not all that helpful to point out here. My point is that a judgment is in the court, so the debt is proven unless you get that unwound.
Fight them!!!!! Do not give in you can win as I did they never showed up to court!
Adam – Are you referring to fighting a debt collection lawsuit from Midland Funding?
I was hoping you could help me. I am currently in debt about 30,000 with 7 cards.
Two cards are Capitol One, 3 master cards and two Visas held by Bank of america.
I have been late here and there with payments but have tried to always pay the min balance due to not fall too much behind. Because I have done this I cannot afford to pay the round of next months bills.
I do have family that is willing to lend me a lump sum to clean up this mess. I would like to come to settlements on these accounts and move forward. Do you think this is possible and at what percentage?
Please advise.
Thank you.
Beth – You have some great questions. I can assist you with the estimate of how much money you will realistically need to settle with Bank of America and Capital One. This post is better reserved for discussing resolving debts with Midland Funding LLC or Midland Credit Management. If you plan your strategy for settling correctly, you will never have to deal with either.
Please follow this link: Settle credit card debt directly with bank. Post a rounded balance for each account and identify which balance is owed to whom. I will then be able to give you a good target amount to expect for your end results.
Hi Michael,
Just wanted to update you on what’s happened. I had mediation with Midland Funding’s attorney and we agreed that in lieu of judgement they would dismiss my case. In order to get them to do this however, I agreed to pay $50 a month for the first year and $100 starting next year until the balance of $3295 is paid in full. I had to sign an agreement that if I defaulted that a judgement would be entered with the court.
I feel this was a good option for me. I get the low monthly payments that I need while in nursing school and I avoid the judgement, while paying off a debt that I needed to pay anyways. Thanks for your advice while going through all of this. I really appreciated your time and reading your other posts…..Misty
Misty – I am glad you were able to work out a payment arrangement with Midland Funding that works for you. It sounds like you were able to get your deal set up in a way that will keep you from having a judgment in the court, and on your credit report, as long as payment are made on time. That is great too. Best of success to you!
Hello Michael!
Thanks for the service you are providing. Here is my situation…
Midland Financial just served me for a PayPal to Providian to Wamu to Chase Credit Card where my last payment was made on May 18th, 2009 … 4 years ago. I’m located in Colorado – and I believe the SOL is 3 years, but others say it is 6 (perhaps you can share some light 🙂 ). I would like to validate this debt, but from what I have read through your amazingly informative comments… is too late for that step?
My question to you is should I send a letter to validate the debt and go from there … or should I attempt to settle with the law firm representing Midland Funding LLC in this case.
Their Law Firm is:
Ferrell & Seldin
7807 E. Peakview Ave., Ste. 410
From what I have read… It sounds like I should NOT call them until I am ready to settle on the account – and to do everything else in writing. My court date is set for early June.
Thanks for the help Michael!
Greg – You are looking at a 6 year SOL in Colorado for credit card debt. You are correct about it being too late for sending the general request for debt validation. You can still get what you are looking for from a validation request, but you have to do all that through the formal court process at this point.
If you are in a position to be able to fund a settlement quickly, yes, calling and negotiating with the attorney for Midland Funding is how to get the ball rolling. What is the amount you are being sued for, and what amount can you come up with to settle?
Have you filed an answer to the lawsuit, or are you hoping to settle this quickly at this point?
I have yet to file an answer to the lawsuit … I was going to call the county to be sure they actually filed the case before I responded to them but wanted to get your opinion first. There isn’t a Case Number on the Subpoena and everything I’ve read about debt collection with Midland Funding and Farrell & Seldin is sketchy. They are saying I owe $8500 and if I needed to settle I could come up with $2200 right now. I would love your opinion. Thanks Michael.
Greg – Check with the county. It would be interesting to hear if you uncovered anything out of the ordinary.
I am not all that confident you would be able to settle for the 2200.00. You may be better off getting your ducks in a row with the court in order to reach an amount you can afford to settle with.
It is always a good idea to connect with your own attorney in a situation like this. Have you considered doing that?
Michael, just yesterday my boyfriend received a letter from midland stating that he owed a debt bought from t-mobile for $1600. My boyfriend has never had an account with t-mobile so the debt can’t possibly be his, but with all these stories of midland ignoring DV’s and continuing to sue anyway, we’re not sure what to do. Especially since he’s 19 years old with little to no resources to fight them. Please help?
Diana – He has not been sued yet. So lets make sure that does not happen. Send in your request and get right to the point that the debt is not his and that there is a mistake being made. Was your boyfriend recently a victim of identity theft?
We’re thinking it could have been identity theft but credit companies don’t seem to have any record at all for him (since he hasn’t built credit yet) and his bank account seems fine as well. Now when you say send in a request do you mean the DV? (Since I’m thinking this isn’t something that should be handled over the phone?)
Diana – Yes, sending Midland a debt validation request or disputing as not your is the first step. You can follow it up with a phone call, but it is a good idea to get the issue documented. If your boyfriends ordeal is not corrected you will want that documentation. Be sure to send all communication certified mail return receipt requested. Post an update to this comment string as things progress.
Hello, my husband from whom I have been separated for 4 years, is being sued by Midland Funding, he retained a lawyer to respond to the summons. He owes the money, orginally $6000, now $7000 with interest, but he is on Social Security only with no other income. After the suit was filed he offered Midland about 30% which was all the cash money he had, they responded with a hardship P&L request which we gave to the lawyer, she said to not fill it out yet. We own no real estate and he has a 401k and IRA in his name only. He paid the lawyer $1500 and now she wants him to admit truthfullyon Midland court response that he does owe the money, but we are not sure if she is going to try and settle for less. He is willing to take some money from his 401k to pay the debt, but just the original amount of $6000. If they get a judgement for more, can they garnish his Social Security, 401k or IRA accounts? They are not big by any means. Also, are my checking/savings accounts in jeopordy? It is not my charge account and they do not mention me in the suit. Thank you.
gail – Social security is exempt from garnishment. So are retirement accounts in situations like this. You are not named in the suit so you are not generally at risk from the suit. If your husbands name is also on your bank account, and were a judgment entered, there could be some risk of a bank levy. If your husband was intent on settling, the 1500 would have been better used for that. Please keep me updated with how this plays out by posting an update to this comment thread. There are other ways to manage the situation. You or he are both welcome to call us here at CRN for a consultation. There is no fee for that.
Hi Michael,
Thank you for the response, I sure wish I had found this website before it all began, thank you SO much for helping those in these situations. I feel that most of us want to pay what we owe in good faith, but when finanacial situations arise that prevent you, you just need some guidance and suggestions. While we did offer Midland some money, they did respond with a request for personal financial information, but we had already contacted a lawyer becuase we did not respond to the summons, and she told us not to provide that to them just yet. The lawyer is filing a response in which my husband answered the questions truthfully, that it is his account and would like to pay the original amount owed the original lender and based on his financial situation make a payments that he can afford. There were many other situations that prevented us from paying, we sold a house and the mortgage broker/title company was owned by the same person and they took off with $50k, so it’s not like we did not want to pay. Anyway, I will keep you posted and good luck to everyone. The lesson we have learned over the years is to not borrow money, we are totally debt free (thanks to Dave Ramsey) and I’m sure we will clear up the problem in an ethical way.
I’m in Illinois by the way.
Michael,
State police just left papers at my parents house for me. Midland Funding, LLC is suing me for $1,937+costs for a Chase Credit card account. I have never in my life received any collection notices from Midland. It says I have to appear in court in 15 days. What are my options? I have no job, no income, and no assets. I’m literally broke right now and probably can’t even afford someone to represent me. What can I do?
Mike – Unfortunately your options are limited. You can file an answer and defend the suit with or without an attorney. You can raise the money to settle with Midland Funding. You can agree to some form of payment.
The other option, and it is not a good one, is to do nothing. The suit will go to judgment, but you can settle that when you get back on your feet.
What are your options to raise funds?
What is your inclination?
Michael,
I have also received a summons from Midland Funding 764.47. I understand this is less than many people have out there, but I do not wish to have debt lingering over my head. They also have an attorney to represent, assuming this goes to court without settling. I am interested in settling because I’m looking to pay off debts. Am I correct in saying I would contact the listed attorney to arrange a settlement? Also, assuming that he accepts the settlement, should I still send an answer to the court? If I send an answer to the court and the attorney not admitting or denying the debt, could I then contact him later to save for a better lump some? Assuming he accepts the settlement, how will the courts know? Will I need to provide the documentation he sends to me, to the court? Or will he do it? I would rather have this settled outside of the court room if possible.
Chris – At the point where your Midland Funding places your account with an attorney for collection, and most certainly once the attorney files suit, you will need to work something out with the attorney when settling or setting up payments.
Sound advice is that you should contact an experienced consumer law attorney regarding your many questions. I can offer you some general feedback though.
If you settle before your answer to the complaint and get that documented and paid, an answer would not necessarily be required, as you resolved it. The attorney would dismiss the suit shortly after your settlement money clears.
You can always contact the attorney after responding through the court in order to resolve the debt. With the balance as low as yours, I just would not expect the amount of the settlement to change.
If the settlement is accepted and funded, the collection attorney would typically file a motion with the court dismissing the case. You would not normally need to notice the court yourself, but one of the reasons you get everything document before paying a settlement is in the event you needed to show your issue is resolved. Attorneys and law firms make mistakes, stuff can slip through the cracks, accidents occur, human error… it’s just best to be prepared.
Michael,
Thanks for your feedback. I have an Answer to send to the Attorney on Monday morning. Would there be any harm in sending the answer and then contacting him the same day to arrange settlement? Or just not send one at all. I just have a simple DV letter written up. Also, as far as the settlement amount… from your experience, do you not expect them to take less than the 764? I understand it’s a smaller amount..but I was thinking of offering maybe 60% of the amount owed? Part of my letter is posted below:
According to the Summons I received, it states I am indebted to you in the amount of $764.47. At this time, I do not have proper evidence to agree these funds are owed. Under the Fair Debt collection Practices Act (FDCPA), I have the right to request validation of the debt you say I owe you. I am requesting proof that I am indeed the party you are asking to pay this debt, and there is some contractual obligation that is binding on me to pay this debt.
Be advised this is not a refusal to pay, but a notice that your claim is disputed and validation is requested. This is not a request for “verification” or proof of my mailing address, but a request for validation. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you. I will require 30 days to investigate this information once received.
Chris – I am sorry, but you are making this a bit more complicated than it really is. The FDCPA section about debt validation requests is not going to apply now that you have been sued. You can certainly go after that same type of information, but you will now have to get that through the court process that has already been instigated. There is no reason to send a validation request to Midland Funding, or the attorney. They have no obligation to respond now.
Yes, I regularly see 60% settlements with Midland Funding. Each settlement is a bit situational, but I think you have a shot at that target.
If it were me, I would call and negotiate a settlement first. I would say something like “I got served these papers, but I do not really agree I owe this amount. I am prepared to defend the suit, but thought I would call to see if this can just be settled right now for XXX.XX?” If there is nothing to discuss, than you have preserved your right to defend it.
Michael,
Thanks so much. I’m very unfamilar with this process as this is one of two cards I have (and the first time going through this process). I will scratch the letter for now and contact the attorney on Monday. I appreciate your feedback.
I called and spoke with them and they would not do a settlement if I did not provide my employment information. I did agree to payment arrangement but they said the attorney’s are still going to request a judgement. This means I will still need to go to court, correct?
I understand that setting up payment arrangement is sometimes the only way to get through a collection event, but you would be better served by settling if you can afford to. That is how you avoid a the consent or stipulation to judgement being part of the court record and part of your credit report for the next 7 years.
What amount of money can you come up with?
I owed $6429 to Bank of America. The last reported date on this account was 03/08.
Midland purchased this account on 06/11 and has been reporting collection on my credit since then.
I live in Texas and the SOL for our state is 4 years. So legally they can’t do anything but they’re trashing my credit.
I am sure I received a letter from them on 2011 but since I know the SOL was passed I did not request a DV.
Now I am trying to refinance my house the this report will stop me getting approved.
Is there anything I can do about this? I appreciate any help you can give me.
Tony – In order to get over the refi goal line you will likely have to settle with Midland Funding and get their entry to show a zero balance owed.
If the date of last activity with BofA was 3/2008, you have 2 to 2.5 years of the Midland Funding credit report entry to show before it should age off of the credit report along with the Bank of America charge off.
If you weigh the value of settling the Midland collection account at say 50% beside what you save with a lower interest rate on your home, settling and getting the refi should win. Otherwise, you could wait out the credit reporting time line. If you go this route, make sure you monitor your report to see that Midland’s entry falls off at the same time BofA does. That is how it should work, but doesn’t always, and it is a quick fix.
The payment was made at the end of January. They Jacked up to a high figure including court costs. I settled with Midland for $900. the strange thing is that it appears as unpaid for Capital One, with court judgement underscored. That is deregatory. Both Midland and capital one have told me that the court judgement will not be removed even if I have settled for less amount or half amount. The original creditor , I believe, had gotten its loan amount, however I paid a total of $2,400 for a loan of $1,500, what I paid each month is less. I sent to Midland Credit management, LLC, but the debt show as Capital One with Court Judgememnt. As early as yesterday some told me (capital One and Midland), it will take another 3-4 months to show on my credit report but the court judgement will not be removed. It looks like a life sentence affecting one’s livelihood. I appreciate this web site for the exchange and discussion, you made me feel home. We need a reform to put the phone numbers of each creditor, when the loan is bundled up and sold to another creditor. Calling them is a nightmare. Each transfers you to another caller and some tell you that reporting to the credit Bureau is not their job,- they evADE RESPONSIBILITY. yESTERDAY i HAVE TO HOLD HOURS. i BELIEVE SOME TELEPHONE NUMBERS ARE OUTSOURCED, BECAUSE i HEAR PEOPLE WITH ACCENTS ALSO. tHANK YOU FOR YOUR SOLUTIONS.
Gedlu – I have some concerns with what you are sharing. You should not be dealing with Capital One and Midland Credit Management on the same account that is in the courts. The best way to get to the bottom of this, that will help me provide meaningful feedback, would be to speak with you. Scroll all the way up on this page and fill in the form box in the right column that is used to request a CRN consultation and hit submit. I will connect with you from there.
I settled a debt with Midland Funding LLC after they sued me in St. Louis. I disputrd things I did not buy using my credit card. Theu publicised my name. I settled with midland. It did not improve my credit score. I understand that they bundle the debt and sold it to Mid Land LLC. may be we sent our money to the wrong place. I settled few little amounts with AFNI too. The attorneys have several names in many places. My court case# in St. Louis Circuit Cpourt , Division 27 is : 1022-AC06363. I need some help how to contact the lawyer to send me a letter that the account has been paid. In my opinion to say they are thieves is an understatement. We need a reform in debt collection!
Gedlu – Debt Collection in the US has long been in need of reform.
If you have already paid what was agreed to settle the collection with Midland, where was that payment sent, to the attorney suing you, or to a Midland Funding address?
When was the payment made, and what is showing about this account in your credit report right now?
I have the money to settle two accounts that are currently held by a Law Firm from Midland Funding. My question is regarding my credit. Is there any way to negotiate with the Attorneys to have my debt removed once payment has been made or I do I have to wait the typical seven years before it is removed from my credit?
I sent the Law Firm a letter stating that I am willing to pay the accounts in full if they would remove all the negative information from my credit, but I have not heard back from them. It has been about a month.
Claudia – Are the Midland Finding debts with the law firm part of any court action, or is the collection firm only recently trying to collect from you?
If these are not judgments, paying the debts in full or for less is not going to get the credit reporting removed. The collection firm has absolutely no part of the credit reporting anyway. You can expect your credit reports to be updated after payment with a zero balance owed. It can take up to 60 days after payment for the credit report to be updated. If it somehow fails to be updated, you can get it corrected yourself. Be sure that any arrangement you make with the law firm is documented before making any payment. You may need that documentation and proof of payment later.
The credit reporting entry from Midland Funding LLC (if any), is related to accounts with your original creditor who would be showing a charge off status. The negative entry from the original lender, and any credit report entry from Midland Funding should age off of your credit report no later than 7.5 years from the date you first missed a payment to the original lender. Even though the negative collection and charge off reporting stays on your credit report for a considerable amount of time, you credit will improve over time. You can still access credit at fair pricing in the near future, and before this stuff ages off.
If you want to resolve the debts I would not waste much effort with writing letters. Phone calls are more effective 99% of the time in my experience.
don – Yes and no. You do not typically see an immediate bump to your credit score from the “act” of settling with Midland or other collectors and creditors that are showing a key derogatory or collection item on your credit report. What you do see within usually 30 days is a zero balance owed updated to the credit report. This helps your debt to income ratio part of calculating your score, and would help get approved for mortgages etc. Once the account is resolved, and updates as such on your credit report, your credit score can make rapid or incremental jumps in 3, 6, 9 months depending on what else is good and bad on the report.
I do not want to make this sound complicated, it’s not. It is just different from one persons set of circumstances to the next. Let me put it this way:
If there are 7 good things reporting on your credit, and only one bad item from Midland Funding, paying it off or settling with them will help your credit report more rapidly in my experience.
If you have only 2 items on your credit report, one of them good, and the Midland collection being the other, settling or paying it will typically result in a longer time frame needed to bring up your credit again.
Feel free to ask questions in the comment section of any posts you read. That is what the site is here for.
One of the debts is a judgment, so how will that be handled differently?
I called the Law Firm and they told me that they would only issue a letter once payment is received stating that the debt has been settled, so I can’t obtain documentation prior to the releasing of funds. I don’t see that I have any options left…or do I?
Claudia – Paid or settled judgments with the attorney for Midland Funding will mean the judgement should be updated as satisfied with the court. You should look for any written agreement to settle or pay the judgment debt they are collecting, contain the fact that THEY will notify the court the judgment has been satisfied.
You can get the court record updated yourself with the proper documentation and proof of payment, but getting them to do it is far better.
If you are paying the judgment debt for less than the balance owed on it, I would suggest getting that outlined in writing before paying. Even if you are paying it off in full, I would recommend getting something in writing before paying. Midland Funding attorney may have been referring to that fact that they are not going to file anything with the court until your payment is received. That is normal. If they are agreeing to accept less than the full judgment amount to satisfy it, paying them first means an attorney can drag its feet on updating the court record, and they may not follow through. I have seen enough of this lately with judgment debt situations where it is just smart to get the docs in hand before making the lower pay off to settle it.
I would not suggest paying anything on the non judgment Midland Funding account until you have that agreement documented. That document and proof of payment can later be used to update your credit reports if Midland misses that step, and will also come in handy if some mistake happens later on.
Documenting settlement and payments is pretty standard stuff. What is the name of the law firm?
I have received a summons over a credit card account from Midland. They attached to the summons what I believe is “validation” that the debt is mine from a Legal Specialist for MCM. The document clearly states account charged off 4-10-2006 and the last payment to the account was 2-28-2007. The Tennessee statute of limitations is 6 years and this falls withing the time frame for the SOL. My court date is May 2013 and if you have any advise on how I should address this on my court date I would appreciate it.
Joyce – Ideally you will want to consult with your own attorney when sued. If the debt is indeed outside of the SOL for credit card debts in Tennessee, your answer and defense is going to be pretty basic – as in – the debt is time barred.
If you did make a payment in Feb of 07, counting forward 6 years means they missed the mark. But the suit may have been filed with the court in time, just not served to you immediately if you were not able to be easily found. I really would suggest running all this by an experienced collection defense attorney.
Hi Michael, thank you.
I will try to settle.
I have another question before I settle with midland.
I had another judgment last year with also midland funding, and they filed it correctly where I reside currently, NJ. I paid this off and credit report shows as payment satisfied.
I just discovered, that the judgment was only for $664, and I had paid last year for total of $1097.85 with the lawfirm that filed for midland funding, Pressler & Pressler. All the case # and account matches, while the debt was not.
I overpaid for almost double the amount. What should I do? is this legal?
m k – Is this legal questions should always be directed to an attorney in your state. I can tell you that it is common for a judgment debt to increase with interest set by the court. It is pretty common to see a judgment amount listed along side “plus attorney fees and court costs”. This could be what occurred in your situation.
To get a clearer understanding of what to make of the Midland Funding judgment you could:
Request information from Pressler and Pressler – Speak with Midland Funding directly – Consult with your own attorney – Ask the court clerk how much judgment interest was assessed and how much of what was paid was for court costs etc.
Hi Michael,
I have been in correspondence with MCM for proof of debt, etc via mail. I now have responded via fax that I want to discuss payment arrangement, and had offered an amount to settle with possible 2 dates for payments. The lady I spoke on the phone mentioned, once I faxed, please wait 10 days then call again to discuss.
I received a numerous “unknown” calls and never received any messages, and finally picked up their phone calls on a sunday. The person was very rude, and have an accusation that i was hard to reach, and we have to make payment arrangement. I requested to speak to someone else since he was very condescending and rude, and he wasn’t aware that I have been in touch with MCM. He said that I will have to stuck and deal with him, and there would be no way I could have someone else take care of my account.. him and I will just have to find a way to communicate he said. He calls on Sunday by the way. and several also on saturday.
I told him that he should not be calling on a sunday and would really appreciate if I can call back monday. His response was that sunday also his working days, and since i cannot be reach at all during the week, which was a false statement, that we should just figure it out now.(the previous week I picked up their calls twice, and once i picked up, i was put on hold with automated system, then hung up on me)
On monday, I contacted his supervisor twice, and never received any calls back.
I want to settle this , and I proposed to settle half of my balance to be paid this friday 6/28. But yet it seems that the supervisor does not even bother to call me back.
What should I do..?
mia – You may want to call the main number for Midland Credit Management: 800-265-8825 and start your conversation with something like “I am trying to resolve my debt, but am having difficulty communicating with others I have been connected with at MCM. Can you please connect me with a manager or supervisor so that a payment can be arranged….”
I did not get from your comment that you have already reached an agreement to settle with MCM for the amount you suggested you could pay. If that agreement is not yet in place, be prepared to participate with them in the normal way they handle this type of call. Try not to get too hung up on the demeanor of anyone collecting a debt from you. Just maintain your focus on the result you can afford and do it with a professional tone.
Hi,
Its been useful to read the comments posted on this site. I have three debts. One that is in current settlement(I negotiated a settlement amount and is currently making installment payments). After reading several posts I should have created a different bank account for this. I have it linked to my regular checking account now. The question I have on that one is what will happen to the forgiveness amount? Will this be forwarded to the IRS. The amount forgiven will be about $10K. Also, once I pay in full do I contact them or the original creditor to make sure it shows PAID FULL reflecting on my credit report.
My other question pertain to my second debt with Midland. I have been on the phone with them back and forth negotiating a settlement amount. Original creditor is Wells Fargo. Amount is $16K. I negotiated a settlement amount of $2900, however they won’t take a payment plan option? I can’t give them the full amount right now. I told them I can give them $1K and give the rest in payments over the next 4/5 months. They wouldn’t take it. They stated that they spoke to management and that in order to take the great deal they were offering it would have to be the full amount paid by the end of this month. I’m not working right now. I can’t borrow the money from anyone. I could withdraw from my IRA, but I’ll have to deal with the tax and penalties. How can I convince them of a payment plan? I don’t want to be sued.
My third debt is with the IRS($6K). I’m trying to do an offer of compromise but I don’t think I qualify based on my IRA amount. I’m currently making installment payments on this debt as well. I was told to just transfer my assets to a family member to show I have nothing. True?
Ro
Ro – Once you are finished paying the settlement on the first account referenced, you would typically get a 1099c the following January showing the forgiven debt amount etc. Whether or not you owe taxes on that will depend on whether or not you are solvent/insolvent. See this post for more info: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card – Sometimes you do not get the 1099c. It is best to still account for what you know was forgiven debt in the prior year.
When settling a debt, most often you wait 30 to 60 days to check your credit reports to be sure the creditor/buyer/collector updated their reporting to show a zero balance due. If you find a problem in the way the now settled account is reported, you can use the settlement letter and proof of payment in a dispute with the credit report agencies and copy the provider of that info too.
Your Wells Fargo account now with Midland: Ro – If there is ANY way for you to take them up on the offer and pay in one sum – do it. That is a fantastic offer. I know you said that you cannot think of a way to come up with the money. If you have to arrange payments, the amount you will pay will be higher. That is standard with Midland Credit Management and Midland Funding both (and many other debt collectors for that matter). With payments you get the convenience of monthly affordability, but often lose some of the overall savings advantage.
I am not sure who advised you to transfer assets to a family member as it relates to your IRS debt, but it would be looked at as a ploy. I just do not think something like that is going to go over very well with the IRS. You are already managing the situation as best you can. When push comes to shove, the IRS will come first over your unsecured debts.
Don’t get hung up too much on making payments on the settlement you have going through your regular bank account. It is what it is. It only matters if there is an error in payment drafts, which are not all that common, just hard to deal with if they occur. It can also matter if you cannot follow through on a scheduled payment (may overdraft you causing shortage on bills etc).
Thanks for the reference in regards to the debt forgiveness. I definitely have more debt than assets which might result in an “insolvent” status.
My major concern(once I became delinquent with my debts) was whether or not to do a settlement with each debt or file a BK. I have a total debt amount of $30K. As I said previously I’m currently making payments on one of them. Would you suggest I continue to settle or file for a BK? I’m trying to do the best I can to eliminate debts and re-establish my credit.
About Midland, yes I agree it surely is a great offer. I’m trying to do the best I can to figure a way to give them a lump sum. I was just hoping they would accept a partial payment now and then make an arrangement for the payments later. They gave me two days to think about it. *Sigh* If I comply, I’ll request for the settlement letter before I provide payments.
With regards to the IRS debt, I’ve read about an Offer of Compromise(alternative to settle IRS debt). Since I’m not working and have limited assets, there is a chance I might qualify. However, with the possible “asset name change” I’m sure they’ll have their suspicions and paper trail it. I wasn’t sure how else to handle this debt. If you have suggestion on this, I would appreciate it:)
Truly grateful for your advice,
Ro
Ro – If you can qualify for a chapter 7 where your unsecured debts, like the credit card settlement you are paying now and the debt with Midland Funding llc will be discharged, it can often be the least costly path to eliminate debt. IRS debt can be discharged in a chapter 7 when it meets certain criteria, but my hunch would be you would still be left to pay that debt. It absolutely makes sense to speak with a bankruptcy attorney. Most offer free initial consults, so the price is right….
Given the little info I have from our comment exchange, if you can settle all of your debts within the next 12 months (including the IRS debt paid off if it is a lien showing on your credit), you would recover credit wise rapidly after that, and possibly quicker than after filing a chapter 7.
In the final analysis it does boil down to affordability first, then consider which direction helps you accomplish your future goals the fastest.
I do not have much to offer as feedback for your IRS debt. If you are getting help from a tax pro on your OIC, than stick with that unless you opt for the chapter 7.
I’m sure I can qualify for a Chapter 7 BK. It’s the cost that concerns me to hire an attorney in order to do so. With that cost, I can settle the Midland account. I’m trying to avoid a BK.
It appears that the main issue is that I can’t pay the full $2900 right now to Midland. I might have no other choice but to try and negotiate partial payments even if its means settling at a higher amount. My goal is to pay all of this debt in 6 months. I’m trying to buy a new car and re-establish credit within 1 year if possible.
My first debt is already being paid in installments, Midland is in negotiations, and although I have IRS debt I’m selling a vehicle that might take care of that in the next 30 days. I hear it takes years to establish credit after a BK. I don’t have time for that. Do you know of what type of withdrawals and penalties I’ll incur if I withdraw from my Traditional IRA. I might take that option? I’m not receiving advice in regards to the OIC. I read about it on their website and thought this might be an options for me as well.
Ro – Each situation with early withdrawal from an IRA can be different. If you can find a way to get through this whole situation without touching it, that would be better. But I understand that there are situations where the math supports the decision to make an early withdrawal.
If you would be filing bankruptcy over the Midland Credit Management account only, I am with you, it would not be much less of a cost when you compare the national average cost of chapter 7 of roughly 1800.00 with the settlement offer from Midland. When considering only the Midland collection account, you would be filing bankruptcy over roughly one thousand dollars….
Hi Michael,
I’ve settled all of my accounts and checked my credit report. All delinquent accounts verify a status of “paid, closed, settled, etc”. I would like to re-establish my credit. How long do I have to wait for this? I tried to apply for a credit card recently and was denied. My last debt that was settled was completed 9/13. I have no open tradelines or debts.
Please advise…
Thanks,
Ro
Ro – Congratulations with resolving your old debts. Rebuilding credit is a process, and it takes time. Depending on the individual situation, credit can be rebuilt in a matter of months – to three years after settlement. If you have no positive accounts on your credit report now, the rebuild will be on the longer side of that. Here are 2 resources to help get you started:
https://blog.credit.com/2012/11/11-credit-repair-tips-to-fix-your-credit/
https://blog.credit.com/2013/02/how-fast-can-you-rebuild-your-credit/
Thanks for the advice! I will look into it! Hopefully I can fix this in months vs. years.
Hi , midland funding was suing me for 1332$ , i called to,make payment arrangements and the best they coud do is 100$ month i no i wont be able to keep up with that what will happen if i default ?
Midland Funding will have extra ordinary collection options if they have a judgment against you. Those options are governed by state law. Where do you live?
Im in new jersey , they woudnt even take a offer of 500 outright to pay it off
In NJ your wages are protected up to 90% in many instances.
Personal property is only protected up to 1k (NJ is one of the worst states for this). That has to cover your household goods, and can often leave little to no protection for money in your bank account. This means your car and home are at risk with little protection.
It is not all that common to settle debt that is actively being collected in the courts for less than 50%. If you look like a good collection target it can be difficult to get a deal for half off.
I rent , and dont own my car so thats a plus i guess , we will see what happens when i default on a payment to them it will eventually happen
Hi my name is Kristy [edit] I just received a summons from Bonner County court house in Sandpoint Idaho! Reference # [edit] I’m not sure what this is!! I only have 20 day’s to respond as I’m not in my state! Can you please guide me in the correct direction!! Thank you Kristy [phone edit]. Here’s the court houses number 208-265-1432.. Thank you for your understanding!!
Is the original creditor not referenced in the summons paperwork? If not, let me know. If they are identified, do you recognize the debt? How much is Midland suing you for?
What is your goal for resolving the issue?
How long will you be out of town?
I edited out personal information from your comment.
Hi there, I paid a collection from midland that has a judgement. My mortgage company told me I need the judgement off my record. How can get mcm to file a statisfied judgement like tomorrow?!? Escrow closes next week and I need help!
Getting things moving quickly when settling with a judgment debt is not consistent with the formality of court processes.
When did you pay Midland or the attorney collecting?
Where do you live?
Do you have anything in writing prior to making the pay off?
I have a $5,500 debt with citi that was handed over to Midland. I was not aware of this. I tried to bring my account up to date with citi and they can’t work with me because it is now Midland. I called Midland to see what my options are and told them i could settle but can’t pay them the full $5,500. Told them i could do $2,500. He told me he couldn’t give me answer or work with me because they just got the debt and i would have to call back in a week. I was surprised they weren’t willing to take my money. Have you ever heard of them asking someone to call them back? What are they doing? When i call what should i expect? What should my game plan be?
It is normal to have to wait to resolve a debt recently purchased by a debt buyer. There is an “onboarding” process that can take several weeks. I recently waited 6 or so weeks for Comenity accounts to be set up in order to settle with Midland.
When you call Midland to negotiate your game plan is typically to relay your financial hardship and inability to pay. You have to convince them that what you are offering is all there is. Watch this video because you also need to know that Midland collectors can be looking at your credit reports.
It is important to be realistic with what you can expect to settle a newly purchased account for. If you struggle with the process let me know.