Sued by Midland Credit Management in Virginia? 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 Virginia, the statute of limitations for credit card debt is 5 years. If your last payment was more than 5 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 Virginia 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.

Virginia Wage Garnishment Exemptions

Greater of 75% of disposable earnings or 40x federal minimum wage exempt.

Virginia Consumer Protection Act

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

Virginia Court System

General district court handles cases up to $25,000. Circuit court for larger amounts. Filing fees in Virginia typically range $40-$250.

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 to respond in Virginia?

21 days from service.

What is the SOL in Virginia?

5 years for written contracts. 3 years for oral contracts.

Can wages be garnished?

Yes. 40x minimum wage exemption provides some protection.

Where are cases filed?

General district court up to $25,000. Circuit court for larger amounts.

What is the statute of limitations on credit card debt in Virginia?

Virginia's statute of limitations on a written contract, which includes most credit card cardholder agreements, is five years under Va. Code § 8.01-246(2). For oral contracts, it is three years. For installment loans, the clock generally starts ticking on each missed payment, although most courts treat the full balance as due once the lender accelerates the loan. For out-of-state creditors, Virginia's borrowing statute, Va. Code § 8.01-247, applies the limitations period of the state where the cause of action arose if that period is shorter than Virginia's. Many credit card cardholder agreements designate a different state's law (often Delaware, South Dakota, or Utah), which can result in a shorter limitations period being applied. If you are sued on a debt past the applicable limitations period, you should raise statute of limitations as an affirmative defense in your answer. The defense is waived if not raised. Making a payment or written promise on an old debt can restart the clock.

How much of my wages can a debt collector garnish in Virginia?

After a judgment, Virginia follows the federal garnishment cap under Va. Code § 34-29. A creditor can take the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage. Disposable earnings means what is left after legally required deductions like federal and state taxes and Social Security. Virginia does not provide enhanced wage protections beyond the federal floor for general consumer debts. Child support, taxes, and federal student loans can be garnished at higher amounts under federal law. Virginia law also exempts certain categories of income entirely from garnishment, including Social Security, SSI, veterans benefits, unemployment compensation, and most retirement benefits. You can file a motion to claim exemptions using the form provided with the garnishment notice. Active-duty servicemembers have additional protections under the federal Servicemembers Civil Relief Act.

Can I be sued in a Virginia county where I do not live?

Generally no. Under Va. Code § 8.01-262, venue in most consumer debt collection cases is proper only where the defendant resides, where the cause of action arose, or where the contract was made or to be performed. For consumer credit transactions, federal FDCPA § 1692i goes further, requiring the collector to sue you in the judicial district where you signed the contract or where you reside at the time the lawsuit is filed. If a debt collector sues you in the wrong Virginia general district court or in a county where you have no connection, you can raise improper venue in a motion to transfer venue filed before or with your responsive pleading. Improper venue is also potentially an FDCPA violation entitling you to statutory damages and attorney fees. Make sure to check the court address on the summons and compare it to your current residence and the place the contract was made before filing your answer.

What is the Virginia Consumer Protection Act and how can it help?

The Virginia Consumer Protection Act, Va. Code § 59.1-196 et seq., prohibits fraudulent acts and practices by suppliers in connection with consumer transactions. The VCPA has been applied by Virginia courts to certain debt collection conduct, particularly where a collector made false statements about the amount or character of a debt, threatened action it had no intent to take, or used deceptive collection practices. The Virginia Attorney General's Consumer Protection Section can investigate and bring enforcement actions, and the VCPA also creates a private right of action under § 59.1-204. Remedies include actual damages, attorney fees, and treble damages for willful violations, with a minimum of $500 in damages for willful violations. If you are facing a debt buyer lawsuit, a VCPA counterclaim alongside FDCPA arguments can substantially strengthen your position. You can also file a complaint with the Attorney General at oag.state.va.us, which does not provide direct compensation but can trigger investigation.

Does the Servicemembers Civil Relief Act affect debt collection in Virginia?

Yes, and it matters a lot in Virginia given the large active-duty military population in Hampton Roads, Northern Virginia, and Quantico. The federal Servicemembers Civil Relief Act (SCRA), 50 U.S.C. § 3901 et seq., caps interest rates on pre-service consumer debts at 6%, allows courts to stay civil proceedings against active-duty servicemembers, requires courts to consider appointment of counsel, and provides protections against default judgments. If a debt collector sues an active-duty servicemember in Virginia, the servicemember can request a stay of the proceedings under § 3932. A default judgment entered against an active-duty servicemember without compliance with SCRA can be reopened. Virginia has its own state SCRA-like protections under Va. Code § 44-102.1 that supplement federal law. If you or a family member are on active duty and facing a debt collection lawsuit, raise SCRA defenses immediately and consult military legal assistance through your installation's JAG office before responding.