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May 2010

Debt Collector Midland buys debt for nickel on a dollar

Posted by / in Weekly Posts / 2 comments

Debt collector and debt buyer Midland Credit Management pays an average of less than five cents for each dollar of debt they buy.

That means if Midland is harassing you for a $7000 old account, they probably paid less than $350 for it.

That’s what I saw when Midland’s parent company, Encore, announced their first quarter results last Thursday.    They paid $82 million to buy $2.1 billion worth of debt.  Actually that’s more like four cents on the dollar.

Many of my bankruptcy clients are people who faced months of harassing calls or even garnishment on debt owned by Midland.   Those people, when they first got into trouble, often asked the credit card companies or banks to work with them.  And got little or no help.

Those same banks then turned around and sold the account for less than five cents on the dollar.

If the banks had been willing to settle for even 25 cents on the dollar, these folks would not be filing bankruptcy.

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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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    Robert Weed

    August 11, 2011, pm31 3:46 PM

    Here’s an business profit update from Encore Capital, the parent of the collection company Midland.

    I wrote a year ago that Midland was paying about 4 cents for each dollar of debt they bought. They are doing better now–down to 3.1 cents.

    That means that Midland pays maybe $155 for the right to chase you for a $5000 charged off credit card debt. They paid that to the same credit card company who might have refused to work with you when you asked them to reduce your monthly payment from say $15o a month down to $75.

    That’s why people end up seeing me about filing bankruptcy. In many cases the credit card companies sell debts to these bottom feeders for less than you would have paid them in two or three months if they had worked with you when you got into a jam.

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    Robert Weed

    August 18, 2014, am31 11:12 AM

    Here’s a scary article from the New York times about “debt buyers” collecting on debts they don’t even own. http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html?emc=eta1.

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