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AG Marshall announces national settlement with debt purchasers, many Alabamians will have debts forgiven

From The Trussville Tribune staff reports

MONTGOMERY — Alabama has joined 36 states and the District of Columbia in reaching a $6 million settlement with Encore Capital Group, Inc., and its subsidiaries, Midland Credit Management, Inc., and Midland Funding, LLC, one of the nation’s largest debt buyers, Attorney General Steve Marshall announced on Tuesday.

In Alabama, a total of $784,920 in debt will be fully or partially forgiven for 464 Alabama accounts for judgments that were entered against consumers in cases where Midland used an affidavit against them in court between 2003 and 2009.  Of these, 145 Alabama accounts will receive full forgiveness of a total of $194,760 in debt. Midland will notify impacted consumers by mail of the balance reduction and no further action is necessary from the consumer.

Additionally, $25,000 for each state will be set aside for restitution for those who paid Midland a debt they did not owe, for those who paid more than was owed, or for those against whom Midland used an affidavit in legal proceedings that was inconsistent with the information in its own records. Alabama consumers seeking restitution from this fund may contact Attorney General Marshall’s Consumer Interest Division by calling 1-800-392-5658, by writing to 501 Washington Avenue, Montgomery, AL, 36104, or by submitting an online complaint to the Consumer Interest Division at www.ago.alabama.gov/consumercomplaint. The Attorney General’s Office will then submit those claims to Midland for review. When submitting a claim for restitution to the Attorney General’s Office, it is important for consumers to provide any and all documents that will support their claims.

Debt buying involves buying and selling overdue debts from creditors and other account owners. Often purchased for pennies on the dollar, debt buyers seek to recover the full balance from consumers through collection attempts by phone and mail. Debt buyers, including Midland, also take consumers to court to collect the debts they purchase. However, people are often unable to afford attorneys to defend the allegations and cases result in default judgments, hurting credit and putting people in jeopardy of having their wages garnished.

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