Debt Collectors Are Trying to Collect a Debt that is Not on My Credit Report

By: Robert J. Nahoum

A man in suit and tie with his arms crossed.

The Problem:

You’re at the grocery store buying the family groceries, the cashier rings you up, you swipe your debit card and embarrassingly, the cashier tells you that your card is no good.  You call your bank and are told that your bank account has been frozen.

You dig a little deeper, call the court and discovery that you were sued by a debt collector many years ago and that a default judgment was entered against you.  How did this happen? How could you not have known about it – you diligently monitor your credit and never saw anything about this debt or the judgment?

The Rules:

Default judgments are often entered against consumers who never knew they were sued because they were never properly served with a summons and complaint.  New York laws require that when a debt collection lawsuit filed, a process server has to deliver the lawsuit to you, another adult in your home or by taping the papers to your door and mailing a copy (called “nail and mailâ€).  The problem is, often this service never happens.  The process server signs an affidavit saying that he or she delivered the papers to you when in actuality, he or she did not.

With a default judgment in place, a debt collector can easily freeze bank accounts, garnishee wages and seize property.

More than ninety percent of all consumer debt collection lawsuits are estimated to result in default judgments.  Debt collectors love default judgments.  In fact, if it were not for the overwhelming prevalence of default judgments, the debt collectors would probably be out of business.

For the following reasons, just because there is a judgment against you does not mean it will show up on your credit report:

  • Judgments are not reported by the debt collectors. The credit reporting agencies (CRAs) themselves comb the public records for judgments. The CRAs don’t comb all the court records especially the small local justice courts and so some judgments are missed.
  • Debts will live on credit reports for only 7 years. Judgments are enforceable for 20 years. So if the debt that gave rise to the judgment is older than years, it will no longer show up.
  • Not all creditors report debt to the CRAs. There are some junk debt buyers that, as a business practice, simply do not report the debts they are collecting.

What You Should Do:

Fortunately, New York courts have recognized that default judgments are highly questionable particularly due to the pervasiveness of sewer service.  For this reason, default judgments can be reversed or vacated by filing an “order to show cause†with the court challenging service of the court papers.

If you need help settling or defending a debt collection law suit, filing for bankruptcy, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.  With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202