Sued by Midland Credit Management in Arizona? Here's What to Do Next

2015 · consent order

$42M in consumer refunds + $10M civil penalty; ceased collection on $125M in debt

CFPB found that Encore, Midland Funding, and Midland Credit Management violated the FDCPA, CFPA, and Fair Credit Reporting Act by collecting on debts they could not substantiate, filing misleading affidavits in court, and pursuing debts past the statute of limitations.

CFPB source

2020 · lawsuit settled

$15M civil penalty + consumer redress

CFPB sued Encore and its subsidiaries for violating the 2015 consent order — including continuing to collect on time-barred debt without required disclosures. The settlement extended the conduct provisions of the 2015 order for five additional years.

CFPB source

Statute of Limitations Defense

In Arizona, the statute of limitations for credit card debt is 6 years. If your last payment was more than 6 years ago, the debt is time-barred. Midland Credit Management has been the subject of CFPB findings related to suing on time-barred debts — check your dates carefully and raise the SOL defense in your Answer.

Lack of Standing / Chain of Title

As a debt buyer, Midland Credit Management must prove they actually purchased your specific account. Demand the complete chain of title — the purchase agreement, bill of sale, and assignment documents. In Arizona courts, failing to produce this documentation can result in dismissal.

Challenge the Amount

Demand a complete accounting from the original creditor's last statement through the current claimed balance. Any unauthorized fees, post-charge-off interest, or collection costs not in the original agreement should be disputed line by line.

Arizona Wage Garnishment Exemptions

Arizona Proposition 209 (effective December 2022) capped wage garnishment at the lesser of 10% of disposable earnings or the amount exceeding 60x the applicable minimum wage — among the most debtor-protective in the U.S. Wages of those earning 40x the federal minimum wage or less are fully exempt.

Arizona Consumer Fraud Act

In addition to the federal FDCPA, Arizona's Arizona Consumer Fraud Act may provide additional protections and remedies against Midland Credit Management's collection practices.

Arizona Court System

Justice courts handle cases up to $10,000. Superior court handles larger civil cases. Filing fees in Arizona typically range $50-$350.

Who is Midland Credit Management?

Midland Credit Management (MCM) is a debt collection company and subsidiary of Encore Capital Group. They purchase defaulted debts from banks and other creditors, then aggressively pursue collection including filing lawsuits.

How do I respond to a Midland Credit Management lawsuit?

You must file a written Answer with the court before your state's response deadline. In your Answer, you should deny the allegations you dispute, raise affirmative defenses like statute of limitations or lack of standing, and demand they prove they own the debt.

Can Midland Credit Management garnish my wages?

Only after they obtain a court judgment against you. If you do not respond to the lawsuit, they will get a default judgment. Some states like Texas, Pennsylvania, and North Carolina do not allow wage garnishment for consumer debts.

What if Midland Credit Management is reporting wrong information?

If MCM is reporting inaccurate debt information to credit bureaus, this may violate the FDCPA and the Fair Credit Reporting Act (FCRA). You can dispute the information with the credit bureaus and file complaints with the CFPB.

Is Midland Credit Management the same as Midland Funding?

Midland Funding LLC is the entity that purchases the debts, while Midland Credit Management is the collection arm that contacts consumers. Both are subsidiaries of Encore Capital Group and often appear together in lawsuits.

How long do I have to respond to a debt lawsuit in Arizona?

You have 20 calendar days from service to file your Answer with the court.

What is the SOL for credit card debt in Arizona?

6 years for written contracts including credit cards. 3 years for oral contracts.

Can debt collectors garnish wages in Arizona?

Yes. Up to 25% of disposable earnings can be garnished. Arizona follows federal garnishment limits.

Where are debt lawsuits filed in Arizona?

Justice courts for smaller amounts, superior court for larger claims. The case must be filed in the county where you live.

What is the Arizona statute of limitations for credit card debt?

Arizona Rev. Stat. § 12-548 sets a six-year statute of limitations for actions on debt evidenced by a contract in writing, which Arizona courts have applied to credit card accounts. The clock typically begins running on the date of the consumer's default, usually the date of the last payment. Once six years pass without a lawsuit, the debt becomes time-barred. A collector who sues on a time-barred debt violates 15 U.S.C. § 1692e(2) and § 1692f(1) of the federal FDCPA, and you should raise the statute of limitations as an affirmative defense in your Answer along with a counterclaim for statutory damages of up to $1,000 plus actual damages and attorney's fees under 15 U.S.C. § 1692k. Be careful not to make new payments or sign new acknowledgments, which can restart the clock under Ariz. Rev. Stat. § 12-508.

Are debt collectors required to be licensed in Arizona?

Yes. Ariz. Rev. Stat. §§ 32-1001 to 32-1057 require collection agencies, including out-of-state debt buyers collecting from Arizona residents, to hold a current license from the Arizona Department of Insurance and Financial Institutions. An unlicensed collector who attempts to collect or files a lawsuit violates the licensing statute and the FDCPA's prohibition on false representation of authority under 15 U.S.C. § 1692e(9). You can verify license status on the Department's online portal. If you're sued by a debt buyer, check whether the named plaintiff (not just its lawyer) is licensed in Arizona. Lack of licensing is a complete defense to the suit and grounds for dismissal. It also supports an Arizona Consumer Fraud Act claim under Ariz. Rev. Stat. §§ 44-1521 et seq. and an FDCPA counterclaim.

Can a debt collector reach my house in Arizona?

Arizona has one of the most protective homestead exemptions in the country. Under Ariz. Rev. Stat. § 33-1101, up to $400,000 of equity in your primary residence is protected from most judgment creditors. The exemption applies automatically to your homestead and does not require recording. That means most credit card or medical debt judgments cannot force a sale of your home; the collector can record a judgment lien, but they generally cannot execute on the property unless your equity exceeds the homestead amount. The exemption does not protect against purchase-money mortgages, mechanic's liens, or certain government claims. Federal benefits like Social Security and SSI deposited in a bank account remain protected under 42 U.S.C. § 407. If a creditor tries to levy or execute on exempt property, file a claim of exemption with the court promptly to halt the action.

What happens at a justice court debt hearing in Arizona?

Most consumer debt cases in Arizona for amounts up to $10,000 are filed in justice court, which operates under simplified rules under the Arizona Rules of Procedure for Justice Courts. You have 20 days from service to file a written Answer (Justice Court Rule 109). At the initial appearance or pretrial conference, the judge usually asks both sides whether they can settle. If you have raised defenses like statute of limitations under Ariz. Rev. Stat. § 12-548, lack of standing, or failure to validate under 15 U.S.C. § 1692g, the judge will set a trial date. At trial, the collector must produce admissible business records establishing the debt, the chain of assignment, and the current balance. Many debt buyer cases collapse here because the plaintiff cannot get business records past hearsay objections without a proper custodian witness.

What is the Arizona Consumer Fraud Act and how can it help me?

The Arizona Consumer Fraud Act, Ariz. Rev. Stat. §§ 44-1521 et seq., prohibits any deception, false promise, or misrepresentation in connection with the sale or advertisement of merchandise. Arizona courts have applied the Act to abusive debt-collection conduct, especially false statements about the amount owed, the legal status of the debt, or the consequences of nonpayment. The Act gives consumers a private right of action under case law (Sellinger v. Freeway Mobile Home Sales) for actual damages, attorney's fees, and in some circumstances punitive damages. It is a useful parallel claim alongside an FDCPA counterclaim under 15 U.S.C. § 1692k, especially where the conduct violates 15 U.S.C. § 1692e (false or misleading representations) or § 1692f (unfair practices). The Arizona Attorney General's Consumer Information and Complaint Unit also investigates patterns of collection abuse.