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.