ATLANTA — Tens of thousands of debt collection cases move through metro Atlanta courts each year, but a Channel 2 Action News investigation found many defendants never respond to the lawsuits against them.
Channel 2 Consumer Investigator Justin Gray sat through full debt court calendars in Fulton County and analyzed a random sample of 1,000 debt lawsuits filed in Gwinnett County.
The investigation found that among cases in the sample that resulted in a judgment, 74% ended in default judgments. In 97% of those default cases, defendants filed no answer at all.
That means many of these cases are effectively decided without the defendant mounting a defense.
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What happens when defendants fail to appear?
The pattern became clear inside the Fulton County Magistrate Court.
“The defendant has failed to appear,” the court announced in one case.
“Failed to appear,” came the announcement in another.
And then another: “Failed to appear for today’s scheduled court date.”
Judge Ashley Drake presided over a packed calendar of debt cases. Again and again, plaintiffs sought default judgments after defendants failed to respond or appear.
Channel 2 Action News Investigates found that debt collection cases make up such a significant part of the court calendar that days are regularly set aside for debt and garnishment cases.
But the people who do show up can find themselves facing a complicated legal process with potentially significant financial consequences.
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‘I have no idea who WebBank is’
Gray met Michael Mitchell in garnishment court.
Mitchell said he did not know why money was being taken from his paycheck.
“They’re taking $500 a check,” Mitchell said. “So how am I supposed to pay my bills to the people I do owe money to?”
Mitchell said he did not recognize the debt.
“I have no idea who WebBank is,” he said.
But by the time Mitchell appeared in garnishment court, there was already a default judgment against him from a case in Gwinnett County. Mitchell said he did not know that judgment had ever happened.
He went to court hoping to figure out what was going on.
Instead, the judge denied his claim and allowed the garnishment to continue.
“I’m having a hard time buying groceries for my family,” Mitchell told Gray.
Channel 2 later tracked down the original Gwinnett County case. LVNV, a large debt buyer, had sued Mitchell. The complaint showed the debt had been purchased in 2019 as part of a larger batch of accounts.
More than 17,000 debt lawsuits in one county
Channel 2 Action News Investigates found more than 17,000 debt lawsuits filed in Gwinnett County during the one-year period we examined.
We then analyzed a random sample of 1,000 of those cases.
Among sampled cases that resulted in judgments, 74% ended in default judgments. In 97% of those default cases, defendants had not filed an answer.
Attorney Jillian Sandt, who represents defendants in debt cases, told Gray, responding to a lawsuit is critical.
“I think the most important thing is for people to participate in the process,” Sandt said. “Don’t put your head in the sand. Don’t let it go on without you.”
Debt can be bought and sold
Channel 2 Action News Investigates also examined how some of the debts that end up in court change hands.
Many collection lawsuits are filed not by the company that originally extended the credit, but by companies that purchase portfolios of charged-off debt.
“They are buying these charged-off debts for pennies on the dollar,” Sandt said.
Gray obtained one debt purchase agreement showing accounts being transferred in bulk.
The agreement included language stating there were no guarantees about the accuracy of account information and contemplated accounts that could be ineligible, legally unenforceable or uncollectible.
Sandt described the arrangement this way: “Here you go, as is, it’s yours to collect on.”
That can make showing up and responding to a debt lawsuit particularly important because defendants may have questions or defenses concerning the amount, ownership or validity of a debt.
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‘You have to choose between credit card or surviving’
Unlike many defendants, Patricia Fortes came to court.
Fortes was representing herself in a case involving a credit card debt.
She told Gray she had been unemployed for eight months and fell behind on payments.
“You have to choose between credit card or surviving,” Fortes said. “Roof over my head, pay rent or credit card debt.”
Defendants who appeared during the court session were offered an opportunity to participate in mediation instead of proceeding immediately to trial.
Fortes agreed.
She ultimately reached a payment plan that reduced her debt by 30%.
“I’m going to try my best to do what I can so I can fulfill what I agreed today because I had no other choice,” she said.