Midland Funding Is Suing Me in New Jersey — Here's What the Law Actually Says

Midland Credit Management Inc. (MCM) and Midland Funding LLC are two legally distinct but related entities, both wholly owned subsidiaries of Encore Capital Group, Inc. (NASDAQ: ECPG), one of the two largest publicly traded debt buyers in the United States. Encore is headquartered in San Diego, California. Midland Funding LLC holds the purchased debt portfolios — the legal owner. MCM is the servicer that handles day-to-day collection operations and litigation support. When you receive a collection letter, it is usually from MCM. When you are sued in New Jersey, the named plaintiff is almost always Midland Funding LLC.

Encore purchases portfolios of charged-off consumer debt — primarily credit cards from major issuers — at deep discounts, typically pennies on the dollar. The business model depends on default judgments: when defendants do not respond, the court enters judgment for the full claimed balance from a portfolio Encore paid very little to acquire.

New Jersey is an active debt-collection lawsuit state. Midland files a substantial volume of cases in the Special Civil Part of the Superior Court of New Jersey every year. New Jersey's court structure, procedural rules, and regulatory history create a defense landscape that differs meaningfully from every other state in this series.

Unlike Pennsylvania, New Jersey does not have a controlling appellate decision rejecting the rule of incorporation — the doctrine that allows a successor business to authenticate a prior business's records. New Jersey has not adopted an appellate bar equivalent to Commonwealth Financial Systems v. Smith, 15 A.3d 492 (Pa. Super. 2011). But New Jersey has something neither Pennsylvania nor any other state in this series has: two procedural rules — R. 6:3-2(c) and R. 6:6-3(a) — that impose mandatory chain-of-title and documentation requirements on Midland in every Special Civil Part case, at both the pleading stage and the default stage, regardless of whether you appear.

The Consumer Financial Protection Bureau has taken two major enforcement actions against Encore Capital Group, the parent of Midland Funding and MCM.

The first consent order, entered September 9, 2015, required Encore to pay $52 million total: $42 million in consumer refunds, a $10 million civil money penalty, and an agreement to halt collection on more than $125 million in debt that Encore could not adequately document. The 5-year consent order found that Encore's subsidiaries collected on debts they knew or should have known to be inaccurate, filed collection lawsuits using false affidavits, and pursued consumers without the documentation required to prove ownership and accuracy. Encore was specifically required to obtain the original cardholder agreement and account-level transfer documentation before filing suit. The CFPB press release is available at consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts/.

The second consent order, entered October 16, 2020, required Encore to pay $15 million in civil penalties and $79,308.81 in consumer redress. The 2020 order found that Encore had violated the 2015 order: continuing to sue consumers without required documentation and sending approximately 425,000 collection letters missing the required disclosure when a debt may be time-barred. The 2020 order extended the 2015 conduct provisions for an additional five years. The press release is at consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-settles-lawsuit-debt-collectors-and-debt-buyers-encore-capital-group-midland-funding-midland-credit-management-and-asset-acceptance-capital-corp/. The CFPB enforcement actions landing page is at consumerfinance.gov/enforcement/actions/encore/.

These are nationwide federal orders. They apply to Midland Funding's collection activity in New Jersey the same way they apply in any other state. The documented pattern — false affidavits, collection on unverified debts, missing documentation, suing on time-barred debts without required disclosure — is the factual backdrop to every New Jersey Midland case in 2026.

In December 2018, then-New Jersey Attorney General Gurbir Grewal joined 41 other state attorneys general and the District of Columbia in a multistate settlement with Encore Capital Group, Midland Credit Management Inc., and Midland Funding LLC.

The investigation found that Midland had filed affidavits in state courts across the country at high volume without verifying the information in them — the robo-signing practice that the CFPB had separately sanctioned in 2015. The settlement required Midland to reform its affidavit and account-documentation practices and to provide relief to affected consumers.

The structural terms of the settlement: $6 million total to the participating states, $25,000 per state allocated to consumer restitution, and up to $1,850 in judgment balance credits per qualifying consumer.

AG Grewal's statement confirmed that the agreement required Midland to verify information before filing debt collection lawsuits and to cease filing lawsuits using affidavits that had not been personally reviewed and verified by the affiant.

Eligibility for the up-to-$1,850 judgment balance reduction: you may qualify if Midland filed a judgment against you in New Jersey between January 1, 2003 and September 14, 2009, you disputed the debt with Midland before the suit was filed, and you never made a payment on the account after the lawsuit. If you believe you may qualify, contact the New Jersey Division of Consumer Affairs for information on the settlement administrator and how to file a claim.

The 2018 multistate settlement is separate from and in addition to the CFPB actions described in the prior section. New Jersey's AG participation documents state-level findings against Midland that apply directly to New Jersey consumers and are part of the factual record relevant to any current Midland case filed in the state.

New Jersey Rule of Court 6:3-2(c) governs every complaint filed by a debt buyer in the Special Civil Part and imposes five mandatory pleading elements plus a separate sworn affidavit as preconditions to the lawsuit proceeding.

The five elements Midland must plead in the complaint: first, the name of the original creditor; second, the last four digits of the original account number; third, the last four digits of the defendant's social security number if known; fourth, the name of the current owner of the debt; and fifth, a complete chain of assignment from the original creditor to the current owner — every intermediate transfer documented.

In addition to these five pleading elements, R. 6:3-2(c) requires the debt buyer to attach a separate sworn affidavit — not merely a signed complaint — establishing each element. This is a certification requirement, not a bare pleading requirement. A natural person must swear to the chain of title before the case may proceed.

New Jersey adopted R. 6:3-2(c) in direct response to the robo-signing and documentation failures that the CFPB and the multistate AGs documented and sanctioned. The rule is specific to the Special Civil Part — the tier where nearly all Midland credit-card cases are filed.

For a pro se defendant, R. 6:3-2(c) is a pre-merits checklist. Before engaging any substantive defense, examine Midland's complaint against all five elements and examine the sworn affidavit for completeness and specificity. If any element is missing, the affidavit is absent, or the affidavit is generic rather than account-specific, you have a pleading defect to raise in your Answer. Courts have dismissed or stayed complaints that do not comply with R. 6:3-2(c). A specific challenge to affidavit deficiency is stronger than a general "insufficient pleading" objection.

New Jersey Rule of Court 6:6-3(a) extends the chain-of-title protection to defendants who do not appear at all. Even when a defendant fails to respond to a Special Civil Part complaint, the court may not enter a default judgment for a debt buyer unless the plaintiff first provides a chain-of-title affidavit establishing the complete assignment history from the original creditor to the plaintiff.

This rule is unique nationally. In nearly every other state in this series — Pennsylvania, California, Texas, Florida — a default judgment against a non-answering defendant is largely administrative: the court clerk or judge enters the default on motion without independently verifying the plaintiff's chain of title. The burden of proving ownership at trial falls on the plaintiff only if the defendant appears and contests it.

New Jersey is different. R. 6:6-3(a) requires the affidavit as a condition precedent to the default judgment itself — not as a response to a defendant's challenge. A Midland case where the defendant never appears can be denied at the default stage if Midland cannot produce a conforming chain-of-title affidavit.

R. 6:3-2(c) and R. 6:6-3(a) together create a two-stage documentation gate. If you appear and raise R. 6:3-2(c) defects in your Answer, Midland must cure them before the case proceeds. If you do not appear, R. 6:6-3(a) still requires Midland to produce the chain-of-title affidavit before judgment enters. In no New Jersey Special Civil Part case is Midland free of the documentation burden these two rules impose.

The practical significance of R. 6:6-3(a) for a pro se defendant who does file an Answer: the existence of this rule tells you that New Jersey courts take chain-of-title seriously at every stage. Challenging R. 6:3-2(c) affidavit deficiencies in your Answer is consistent with — and reinforced by — the court's own independent gatekeeping obligation under R. 6:6-3(a) at the default stage.

New Jersey uses a three-tier structure for consumer debt collection in the Superior Court. The tier determines your procedural options, discovery rights, and the case's overall trajectory.

Small Claims sub-track (up to $5,000): Cases at or below $5,000 are handled in the Small Claims track within the Special Civil Part. Procedure is hearing-based rather than pleading-based — the parties typically appear at a scheduled hearing and the judge considers the dispute informally. Discovery is curtailed; parties are limited to five interrogatories each. No depositions are permitted.

Special Civil Part (up to $20,000): Cases between $5,001 and $20,000 proceed in the Special Civil Part. The jurisdictional cap was raised from $15,000 to $20,000 effective July 1, 2022. Your Answer must be filed in writing within 35 days of completion of service under R. 6:3-1. There is no consent extension: R. 6:3-1 explicitly prohibits the parties from agreeing to extend the 35-day deadline. An extension requires a court order. Deadline computation follows R. 1:3-1 — the day of service is excluded, the last day is included, and if the 35th day falls on a weekend or court holiday it rolls forward to the next business day.

Law Division (above $20,000): Cases above $20,000 proceed in the Law Division of Superior Court, which provides full civil discovery and standard pleading procedure. Most Midland cases are filed in the Special Civil Part.

The 35-day no-extension rule is one of the tightest Answer deadlines of any comparable court in the country. If you miss it, Midland can move immediately for default judgment under R. 6:6-3 — and while R. 6:6-3(a) will require Midland to produce its chain-of-title affidavit before judgment enters, vacating a default later requires showing excusable neglect and a meritorious defense. File your Answer before the 35-day deadline.

New Jersey has not adopted a strong appellate bar against debt-buyer record authentication equivalent to Pennsylvania's Commonwealth Financial Systems v. Smith. This is an important honest framing for any New Jersey defendant: the foundational defense in New Jersey is more procedural and less doctrinal than in Pennsylvania.

New Jersey's business records exception is N.J.R.E. 803(c)(6). To admit a business record, the proponent must show that the record was made in the regular course of business, at or near the time of the act or event recorded, and that the sources of information, method, and time of preparation indicate its trustworthiness. The standard is similar to the federal business records exception and to Florida's four-part Yisrael test.

New Jersey appellate courts have not issued a controlling decision specifically addressing whether an MCM custodian can authenticate records originally created by an issuing bank — a Citibank or Chase account statement, for example — under N.J.R.E. 803(c)(6). New Jersey has not adopted a pro-plaintiff integration rule equivalent to Florida's Calloway doctrine, but it also has not rejected such a rule with the force that Pennsylvania's Superior Court applied in Smith. The absence of controlling authority on this point cuts both ways.

What this means practically: in New Jersey, the R. 6:3-2(c) and R. 6:6-3(a) procedural gate is the primary structural tool, not trial authentication doctrine. An N.J.R.E. 803(c)(6) foundation challenge — attacking whether Midland's MCM custodian can establish that the original issuer's records were made in the regular course of that issuer's business and at or near the time of the events they record — is a legitimate merits defense if the case reaches trial. But leading with a per-se inadmissibility argument backed by controlling NJ precedent is not available the way it is in Pennsylvania.

The recommended approach: at the pleading stage, run the R. 6:3-2(c) checklist and challenge affidavit deficiencies. If the case proceeds, use N.J.R.E. 803(c)(6) to challenge the foundation for original-creditor records at the merits stage — specifically whether the MCM custodian can establish the sources, method, and time of preparation for records created by the bank before the portfolio was sold.

New Jersey Statute N.J.S.A. 2A:14-1 establishes a six-year statute of limitations on contractual claims, including credit card debt. New Jersey's six-year period is the longest of any state in the Answered SOL series. The clock begins running on the date of breach — generally the date the first payment was missed.

If your last payment was in March 2019, the six-year clock began at that point and expires in March 2025. A Midland lawsuit filed in 2026 would be filed outside the limitations period. The SOL is an affirmative defense under R. 4:5-4 that must be specifically pleaded in your Answer or it is waived. New Jersey courts will not dismiss a time-barred case on their own motion.

N.J.S.A. 2A:14-22 is technically New Jersey's borrowing statute, but there is no controlling New Jersey appellate authority applying it to credit card debt buyers. The standard analysis for any Midland case filed in New Jersey is the six-year period under § 2A:14-1, regardless of the original issuer's charter state. If your cardholder agreement contains an express choice-of-law clause selecting a state with a shorter limitations period, raise that clause as a secondary argument — but lead with the six-year primary defense.

The revival trap — N.J.S.A. 2A:14-24 — is the most important New Jersey SOL provision to understand before relying on the SOL as a defense. Under § 2A:14-24, a partial payment alone restarts the entire six-year limitations period from the date of that payment. There is no requirement for a written acknowledgment to accompany the payment. If you made a $25 payment on a charged-off account three years ago, the SOL clock restarted three years ago and Midland has up to six more years from that payment date to sue.

This makes the revival analysis in New Jersey more defendant-adverse than in many other states. Check your payment history carefully — including any auto-payments or settlement payments — before relying on the SOL as a defense.

An important counterpoint: an oral acknowledgment of the debt alone does not restart the period under § 2A:14-24. Words-only acknowledgment requires a writing signed by the debtor. Midland cannot argue SOL revival based solely on verbal statements. The partial-payment trigger is strict; the oral-acknowledgment trigger requires a signed writing.

New Jersey does not have a state debt-collection practices act equivalent to Florida's FCCPA or California's Rosenthal Act that provides an independent robust private right of action against third-party debt buyers. The federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., is the primary private-right statute available to New Jersey consumer defendants.

The New Jersey Consumer Fraud Act (N.J.S.A. 56:8-1 et seq.) would be a powerful counterclaim if it applied — it provides treble damages and mandatory fee-shifting under § 56:8-19. However, Williams-Hopkins v. LVNV Funding, A-1301-23 (N.J. App. Div. 2023), affirmed A-0298-24 (N.J. 2025), held that the NJCFA does NOT apply to standard third-party debt collection. The New Jersey Supreme Court's 2025 affirmance cements this. The NJCFA should be flagged as a contested counterclaim only where Midland's own affirmative misrepresentations — rather than the mere collection of an assigned debt — are the basis of the claim. Do not lead with it as the primary counterclaim in a standard Midland case.

Under the FDCPA, you may be entitled to actual damages, statutory damages up to $1,000, and attorney's fees if you prevail. The FDCPA prohibits, among other things: collecting on debts the collector knows or should know are inaccurate (§ 1692e); making false representations about the character or legal status of a debt (§ 1692e(2)); filing suit on time-barred debt without disclosing that it may be time-barred (§ 1692e(2)); and using unfair or unconscionable collection means (§ 1692f). The CFPB's documented findings that Encore's subsidiaries collected on debts they knew or should have known were unverified or time-barred are directly relevant to an FDCPA § 1692e counterclaim.

The FDCPA counterclaim can be properly raised in the Special Civil Part Answer in New Jersey. However, the Special Civil Part's $20,000 jurisdictional cap and curtailed discovery can limit practical fee-shifting recovery on larger FDCPA claims. For those claims, consider filing a separate federal court action — either alongside the SCP Answer or after the SCP case concludes. For pro se defendants, asserting the FDCPA counterclaim in the Answer preserves the claim and changes Midland's settlement calculus, even if full fee-shifting recovery is pursued later in federal court with attorney representation.

New Jersey's defense framework against Midland Funding relies on four primary elements.

First: the federal and state regulatory record. The CFPB actions against Encore Capital Group (2015: $52M; 2020: $15M + $79K) document a pattern of collecting on unverified debts, filing with false affidavits, and suing without required documentation. New Jersey participated in the 2018 multistate AG settlement under AG Gurbir Grewal — documenting that Midland robo-signed affidavits in New Jersey courts at high volume without affiant verification. These records establish the documented pattern of conduct underlying both your procedural challenge and your FDCPA counterclaim.

Second: R. 6:3-2(c) and R. 6:6-3(a). These two rules impose mandatory chain-of-title and documentation requirements at the pleading stage and the default stage respectively — and they apply in every Special Civil Part case regardless of whether you appear. R. 6:3-2(c) requires five-element pleading plus a separate sworn affidavit before the case proceeds. R. 6:6-3(a) requires the chain-of-title affidavit even at default — unique nationally. On day one, run the R. 6:3-2(c) checklist against Midland's complaint and affidavit.

Third: the FDCPA counterclaim. Where Midland's conduct violated the FDCPA — filing on a debt it knew was time-barred, using false representations about balance or ownership, or collecting on a debt it could not verify — you have a counterclaim for actual damages, $1,000 statutory damages, and fee-shifting. Assert it in your Answer and consider a separate federal action for larger recovery.

Fourth: the six-year SOL under § 2A:14-1, carefully analyzed for the § 2A:14-24 revival trap. If the SOL is available and no partial payment restarted the clock, it is one of the cleanest defenses in this series. But verify your payment history first.

The most common procedural failures Midland commits in New Jersey: filing a complaint that does not satisfy all five R. 6:3-2(c) elements; filing with an incomplete or generic sworn affidavit not specific to your account; and filing on time-barred debt without proper FDCPA disclosure.

I'm John DiSalle. In April 2026, I won my own debt-buyer case pro se in Eau Claire County, Wisconsin — Plaza Services LLC v. DiSalle, Case No. 2025SC000885, dismissed April 9, 2026. I had no lawyer and no prior courtroom experience. I read the original credit agreement, found the mandatory arbitration clause, filed a Motion to Compel Arbitration, and the case was dismissed when the plaintiff failed to comply with AAA's procedural requirements.

New Jersey's defense framework is structurally different from what I had in Wisconsin, but it is arguably the most procedurally complete of any state in the Answered series. The R. 6:3-2(c) and R. 6:6-3(a) rules are mandatory checkpoints that run before you ever need to argue authentication doctrine. The FDCPA provides the primary counterclaim where the NJCFA does not. The 35-day no-extension deadline is tight — it forces the case to move quickly in both directions, which can work in a prepared defendant's favor.

I built Answered to give pro se New Jersey defendants the same informed playbook professional debt-defense attorneys use, including the R. 6:3-2(c) procedural checklist, the post-Williams-Hopkins FDCPA framing, and the honest six-year SOL analysis with the § 2A:14-24 revival warning. For the longer story, visit /about/john-disalle.

First: do not ignore the lawsuit. R. 6:3-1 gives you 35 days from completion of service to file a written Answer. Consent extensions are prohibited — only a court order can extend this deadline. Once the deadline passes, Midland can move for default judgment. Under R. 6:6-3(a), the court will require Midland to produce a chain-of-title affidavit before the default enters — but you want to be in the case, not watching from outside.

Second: determine which court tier has your case. Check the complaint header and amount sought. Special Civil Part handles claims up to $20,000; Law Division handles claims above $20,000. Small Claims sub-track (under $5,000) is hearing-based. Most Midland credit-card cases land in the Special Civil Part.

Third: run the R. 6:3-2(c) checklist against Midland's complaint immediately. Does the complaint identify: the original creditor by name; the last four digits of the original account number; the last four digits of your SSN if known; the current owner of the debt; and a complete chain of assignment from original creditor to current owner? Is a separate sworn affidavit attached? Is the affiant identified as a natural person who personally verified the information? Each missing element and each affidavit deficiency is a specific objection for your Answer.

Fourth: check the SOL. When was your last payment? If more than six years have passed with no partial payments in between, the SOL defense under N.J.S.A. 2A:14-1 may be available. If there were any payments after default, calculate whether § 2A:14-24 restarted the clock from the date of the most recent payment.

Fifth: file a written Answer asserting the following defenses where applicable. Defective pleading under R. 6:3-2(c) — enumerate each missing element. Statute of limitations under N.J.S.A. 2A:14-1. Failure to state a cause of action. N.J.R.E. 803(c)(6) foundation challenge to original-creditor records. Arbitration clause if the original cardholder agreement contains one — a Motion to Compel Arbitration under N.J.S.A. 2A:23B-7 can be filed with or before the Answer, and the Special Civil Part can grant it directly without transfer to the Law Division.

Sixth: assert an FDCPA counterclaim under 15 U.S.C. § 1692e or § 1692f if Midland's conduct supports it — collecting on a debt known to be unverified, filing on a time-barred debt without required disclosure, or making false representations about the balance or ownership. Assert the counterclaim in your Answer to preserve it, and consider a separate federal-court action for full fee-shifting recovery.

Seventh: if you believe you may qualify for the 2018 multistate settlement judgment balance credit (up to $1,850 for qualifying judgments from January 1, 2003 to September 14, 2009), contact the New Jersey Division of Consumer Affairs.

Answered's New Jersey playbook builds in the R. 6:3-2(c) procedural checklist, the R. 6:6-3(a) default protection, the post-Williams-Hopkins FDCPA framework, and the six-year SOL analysis with the § 2A:14-24 revival warning. Upload your summons and complaint to identify defects, calculate your 35-day deadline, and generate a court-ready Answer — start with the $60 Answer Packet, or choose $99 Full Defense for deeper workflow support. No subscription.