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Dealing With Cavalry SPV, Midland Funding and Other Debt Agencies

3336 words Read time 16:45

Getting your door knocked on by a stranger only to ask if your name or parents name is available for no apparent reason, is quite alarming. You might be sitting at home, minding your own business trying to isolate yourself from the crazy world we seem to be living in and all of a sudden, it comes right to your doorstep. You answer the door, say your name and then it happens. You just got served a complaint letter saying that Calvary Portfolio Services, Midland Funding, Midland Credit Management or one of the many other debt collection multi-state national agencies out there. Don’t freak out.

Who they are, how they make money

The first thing to understand about these businesses is what their business model is. I can’t say whether or not I have dealt with these creditors before. But what I can tell you is that you’ll learn a significant amount by understanding how they make money and what they’re after. First, what these services do is they purchase delinquent debts from credit card companies or lending providers across the nation. It could be from a Lowes Credit Card to a major financial institution like Chase or Wells Fargo. Once your account goes into default, which means that you haven’t paid your bills in some time, they’ll essentially sell your account to the agency who is trying to sue you right now (Calvary, Midland, or others). They purchase these debts at a very small fraction of the overall amount that you owed to the original lender.

Let me simplify that last part so you can understand it really well. Let's say for instance you owe $100,000 on a credit card. When they sell it to the debt collection agency who is suing you today, they most likely only paid about $5,000 or $10,000 for that account. Yet they are still trying to recoup from you the entire $100,000. This is their business model. And it's all roughly the same way of making money regardless of who the debt collection agency is.

How are they able to do this? Well, there’s really no laws prohibiting them from doing this, it's not that great for the average consumer. All attorneys will simply advise you to file for bankruptcy or something else. Which also isn’t always the best route.

Stay calm, stay calm, stay calm

The first thing I have to tell you is, stay calm. Don’t go immediately writing checks and falling into the trap. Because, yes, it is a trap. You are not alone in America, many people are just like you, struggling to pay their bills and debt. Don’t feel bad about yourself, truly! About 50% of American’s are also in your same position. So don’t get scared, don’t let them use fear to their advantage!

The reality is that whichever creditor gave you that original loan, let's say a credit card or other, took the risk on you. Meaning, by the time they sold it to one of these agencies, they already deemed it being a write-off and didn’t care about it anymore. Let me repeat, even the people you owed the money to in the first place, don’t care about it anymore.

So don’t go writing checks right away! Stay calm, deal with the problem slowly but surely.

Here’s what to start looking into

Now that you are in the problem, the best thing you can do is start to deal with it piece by piece. There’s a couple of things you need to know before moving forward. First is that in the instance that you get a settlement for the amount that you owe, you may still owe some money to the IRS. I can’t exactly say what that will be in your situation. But would I would suggest is speaking to a CPA (an accountant) regarding the matter and what might take place to understand potential tax implications of the amount that you could potentially write off in a settlement that’s for smaller than what you originally owed.

To deal with the problem it's really important to understand the other side of the coin. Meaning, the debt collection agencies original potential purchase price and what their interests of the matter are. Now, if you owe a significant amount, it's not going to be an easy fight. They have a very vested interest in trying to pursue that account (of course). So understand, you are in for some work and it's not going to go away quickly.

If they summoned you to court, never not appear. Definitely appear and if you need to, hire an attorney to help appear on your behalf so you know how to handle the situation moving forward. A great attorney may only cost $1,000 - $3,000 to help deal with the matter. And if the sum of what you are fighting the agency about is larger than that, consider it part of the investment to seal the deal. But of course, don’t make the situation worse for yourself by not appearing. It's very important that you do whatever necessary and simply ask for more time or comply but never exactly say that you agree with whatever the debt collection agency is asking.

Early on, don’t say yes

Early on, ask for proof of the account. Ask for a bill of sale. Ask for any information that you can think of that might prove that the debt collection agency who is suing you properly purchased the account in every legal way possible and can show you that very clearly. That’s step one. Never simply say, yes this is mine and yes I will pay you. Because there have been instances where identity theft has taken place and they could be pursuing you for an account that isn’t yours.

Second, ask early on if there’s a simple way to clear up the matter, its okay to make a really low offer. Explain and prove your financial situation by putting the information into a spreadsheet or simply showing a balance sheet of your monthly records. This is income, bills, expenses, home ownership, etc. If you are like many other American’s you can show that you really don’t have anything to take. That can help you in the conversations quite dramatically. By simply thinking about their position and showing your own, being transparent. But don’t ever lie because that will get you into a worse situation.

Strategies for settlement or other

Again, the best advice I can give without expressly knowing your situation is to think about the other parties intent. Think about what they might need to consider this a profit. That’s their goal, is to make money. And unfortunately, you are in a situation where you may have to give up your own money. In negotiations, no one leaves the table happy. Remember that. But remember not to make them happy.

So the reminder, prove your finances, think about what might be a profit for them in terms price, never say it's your account until they prove it, ask for all information regarding the sale of the debt.

The above is the most key but if these agencies slipped up they might have made some robotic calls or harassments against you. Some of these harassments are signs that they have literally broken the law. And you can use these harassments to your advantage. If they are asking for a sum that’s higher than the original amount, if they robotically called you multiple times or they harassed you in any way, these are worth the whole bag. Meaning, you might not have to pay a penny.

Expectations about the issue

It’s really important to understand that you may or may not actually be eligible for a settlement. And you should assess your own finances before potentially getting an attorney and dealing with the matter. When you go into dealing with all of this, know that could potentially be an outcome. An outcome where you could owe the full amount.

Even in those instances, you don’t have to worry. Remember the other parties interest, it’s to make money. So even if you have to pay the full amount, the worst case scenario is that you set up a monthly payment to the debt agency and send them a check every month with something that’s reasonable for you given your financial situation (see how that budget spreadsheet really comes in handy down the road here).

Now let's say you do have to pay the full amount and you do have to pay the agency monthly, the advice I can give you on that never forgets to pay them. Because then you are in even more trouble and they are simply waiting for you to screw up again. You might be able to get them to agree to this type of setup without an attorney but I would highly suggest reading the agreement you sign with them carefully and knowing that if you forget to make a payment, your penalty’s are going to be dramatically higher.

Conclusion

The reality is that these Companies aren’t going anywhere. With more and more debt going into default in the United States, we’re going to see even more of these types of services pop up. And they’re going to get smarter. Just remember that you aren’t a victim and that you aren’t a unique case. There are hundreds of thousands of people in your same position and that should give you some leverage to steer the conversation. Hopefully, this article helped you in determining the right path for yourself as you decipher what to do next.

Legal Disclosures

This is not legal advice nor is this advice as the result of any situation I have been part of regarding these companies and their debt collection services. This is simply a guide on understanding the factors related to the business and how a consumer might go about acquiring the advice or position to deal with such matters.

Who to work with

I’m starting to compile a list of great attorneys who can help you deal with these matters all across The United States. You probably want someone is relatively close to home, so they can be present in court if needed.

Alabama

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Alaska

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Arizona

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Arkansas

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

California

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Colorado

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Connecticut

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Delaware

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Florida

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Georgia

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Hawaii

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Idaho

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Illinois

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Indiana

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Iowa

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Kansas

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Kentucky

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Louisiana

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Maine

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Maryland

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Massachusetts

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Michigan

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Minnesota

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Mississippi

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Missouri

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Montana

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Nebraska

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Nevada

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New Hampshire

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New Jersey

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New Mexico

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New York

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North Carolina

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North Dakota

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Ohio

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Oklahoma

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Oregon

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Pennsylvania

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Rhode Island

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

South Carolina

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

South Dakota

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Tennessee

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Texas

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Utah

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Vermont

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Virginia

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Washington

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

West Virginia

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Wisconsin

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

Wyoming

Unfortunately we don't have any reviewed or confirmed attorneys that are being suggested in this state yet. If you know someone, please recommend them.

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