No-show debtors losing court cases

Published 3:26 pm Tuesday, December 28, 2010

No one is calling their bluff.

Debt collectors are filing lawsuits and winning judgments against thousands of Americans every year, often without having any concrete evidence to support their claims. That’s because the defendants often don’t appear at the hearing.

Not showing up in court results in an automatic win for the collectors, and that, in turn, often gives them the legal right to tap a debtor’s bank account or salary.

“I’m behind the eight ball,” said James Flanagan, a Suffolk County, N.Y. judge who oversees 25 debt collection cases a day. In all but one or two of Flanagan’s cases, the defendant does not show up, Flanagan said. “I can’t do anything about it.”

Flanagan’s experience is not unique. Judges around the nation contacted by Scripps Howard say the absentee rate in debt collection cases routinely exceeds 70 percent.

Experts and judges say defendants avoid court for several reasons: They don’t think showing up will help; they’re too embarrassed; or they were never notified that they had a court date.

And the courts are increasingly busy.

With the worst recession since the Great Depression pushing more Americans behind on their bills, the number of collection lawsuits across the nation is rising, according to the debt collection trade group, ACA International.

In New York City alone, courts handle 300,000 debt collection cases a year. Seventy percent of defendants never show up and have automatic judgments entered against them.

Frequently, the collectors filing lawsuits aren’t the original creditor. Rather, they have bought the debt from someone else, and they don’t possess the original paperwork that documents the debt.

That doesn’t deter their lawyers, who typically file lawsuits without supporting proof.