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Midland Credit Management Pre-Legal Notification


Black21
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I got a Pre-Legal Notification from Midland Credit Management today. I live in Georgia, so if sued it would go to Magistrate Court. The original creditor is Credit One Bank. The amount is almost $850.

Their first letter arrived either the last couple days of May or the first few days of June. I was in the hospital then, so a neighbor collected my mail and I don't know when exactly anything arrived. The letter is dated 5/10 and says they acquired the account a couple weeks before that, and it said I had until 6/24 to respond, so this pre-legal thing seems very fast. I have my phone set to block all non-contacts, so maybe that's why? I've been recovering from surgery the last couple weeks, so I haven't given the letter much thought, but I've printed out a debt validation letter and will send it out tomorrow. The Pre-Legal also mentions 6/24 as the deadline to respond or make a payment. I checked Credit Karma and pulled my Transunion and Equifax reports, and neither Credit One nor Midland show up there. Credit One used to be on there, so maybe they deleted the account when they charged off the debt? I've been reading about arbitration on this site, and Credit One has it in their agreement but specify AAA. Midland's site says they won't start reporting if a payment is made within 3 months of first contact, but they haven't offered any kind of settlement amount in their letters and I don't even have as much as they want in my bank account and am still out of work. So I'm just exploring my options right now before contacting them and would appreciate any advice on what to do or how to approach them/what to say.

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22 minutes ago, Black21 said:

 I checked Credit Karma and pulled my Transunion and Equifax reports, and neither Credit One nor Midland show up there. Credit One used to be on there, so maybe they deleted the account when they charged off the debt?

The account was deleted when they sold it to Midland.  Part of the sale is the agreement that Credit One delete their trade line to eliminate any counterclaims when Midland sues.

23 minutes ago, Black21 said:

I've been reading about arbitration on this site, and Credit One has it in their agreement but specify AAA.

They also have a carve out for debt cases in small claims court which is what Magistrate Court is.  Arbitration would not be an option.

23 minutes ago, Black21 said:

Midland's site says they won't start reporting if a payment is made within 3 months of first contact, but they haven't offered any kind of settlement amount in their letters

They typically do not offer settlement amounts in their letters and are not required to.  You can settle any time prior to a verdict though.

24 minutes ago, Black21 said:

So I'm just exploring my options right now before contacting them and would appreciate any advice on what to do or how to approach them/what to say.

Send a DV letter tomorrow.  That buys you some time until they answer it.  Hopefully at least 30 days.  They will sue.  Once they sue you can answer with a pre-printed form from the court and they will schedule the case to be heard within 30 days of that.  You have 30 days to answer once served.  Wait until day 28 or 29 to answer and file in person at the court. 

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59 minutes ago, Clydesmom said:

The account was deleted when they sold it to Midland.  Part of the sale is the agreement that Credit One delete their trade line to eliminate any counterclaims when Midland sues.

Interesting! I wish this applied to other cards. I defaulted on a card 6 years ago and it went to collections. I paid it off and the collection never showed up, but the original creditor is still on my report. Combined with Midland's 3 month non-reporting policy, this is pretty good incentive for people to pay.

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They will sue.  Once they sue you can answer with a pre-printed form from the court and they will schedule the case to be heard within 30 days of that.  You have 30 days to answer once served.  Wait until day 28 or 29 to answer and file in person at the court. 

Will waiting until they sue prompt them to report early? 

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22 minutes ago, Black21 said:

this is pretty good incentive for people to pay.

A big reason why they do it.

23 minutes ago, Black21 said:

Will waiting until they sue prompt them to report early? 

Not likely.  Not reporting is about inducing payment and eliminating counter claims.  Once the suit is over they can still report.

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8 minutes ago, Bulldoger said:

This is a long shot but go the MCM site enter your account information click on offers: There is a make your own see how little for have to pay per month you could get down to $15 dollars a month for 5 years. 

Thanks! It looks like I can't get it down quite that low. They require a maximum of 35 monthly payments. But if I could get them down to 60% while still allowing long term payments instead of a single payment, then that would work. 

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1 hour ago, Black21 said:

But if I could get them down to 60% while still allowing long term payments instead of a single payment, then that would work. 

To get a reduced percentage you need to be able to make a lump sum payment.  If you need to make payments then they are going to want the full amount because they are taking a big risk you default again.  They will also require you agree to a consent judgment.  What that means is if you default again they do not have to sue.  They simply file that consent judgment with the court and can go straight to garnishment and/or levy.  DO NOT agree to the payments if you are the least bit uncertain you cannot handle all of them.  There is no margin of error the second time around.

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4 minutes ago, Clydesmom said:

To get a reduced percentage you need to be able to make a lump sum payment.  If you need to make payments then they are going to want the full amount because they are taking a big risk you default again.  They will also require you agree to a consent judgment.  What that means is if you default again they do not have to sue.  They simply file that consent judgment with the court and can go straight to garnishment and/or levy.  DO NOT agree to the payments if you are the least bit uncertain you cannot handle all of them.  There is no margin of error the second time around.

The online payment agreement does not require a consent judgement probably because they haven't filed suit yet. Looks like he can get a $25 a month plan without a consent judgement . If he can keep it up and try settling if he gets a windfall or three years it paid in full and MCM will remove it from credit report.  

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