RUSHMORE RECOVERIES WAGE GARNISHMENT PREVENTED
Default judgments in New York can often balloon to significantly higher
debt amounts because of New York’s judgment interest rate of 9%
and the fact that the judgment can be enforced for up to 20 years. This
gives the creditor the ability to pursue many consumers for a quarter
of their life. Consumers who were young or just struggling financially
eventually turn their lives around and find themselves with a debt that
has tripled after 10 or 15 years. The creditors are happy to wait in many
situations because they know that they will end up enforcing on a much
higher amount of money. In this case, our client was sued on a debt in
2002 while he was on active military duty abroad. As he was abroad he
never received notice and a default judgment was entered against him.
This year, he received a wage garnishment notice from his employer 15
years after a judgment that he did not know about was entered against
him. The creditor that he received the notice from was Rushmore Recoveries
LLC, a debt buyer.
Rushmore Recoveries retained the debt collection law firm of Stephen Einstein
and Associates to enforce the judgment against our client. After reviewing
the original court documents, we learned that the debt had been sold multiple
times before finally reaching Rushmore, that the original judgment creditor
was not Rushmore and that the matter had even been transferred from one
law firm to the other over the years finally landing with Stephen Einstein’s
office. The debt had grown to over $47,000 because of the interest growing
over time. We immediately filed a motion to vacate the judgment against
our client also asking the court to dismiss the matter because we believed
that Rushmore would not be able to prove that they were the proper owners
of the debt because of a lack of assignment documents or chain-of-title.
We also did not believe that Stephen Einstein had ever filed a substitution
of counsel and notified our client as required by New York law. Stephen
Einstein reached out to us and voluntarily vacated the judgment against
our client. They offered a very low settlement to resolve the matter out
of court which lowered the debt amount by almost 80%, an offer our client
decided to accept.