A district court judge in Maryland this week dismissed 3,168 debt collection cases as part of a settlement against debt buyer Worldwide Asset Purchasing and its affiliates.
District Court of Maryland Chief Judge Ben C. Clyburn's order follows a settlement announced last month in a federal class action against the companies. In the case, it was alleged that Worldwide Asset Purchasing and its affiliates were not properly registered or licensed, misstated amounts owed and improperly stated Social Security numbers in state court filings, and filed collection lawsuits after the statute of limitations had expired or on debts previously discharged in bankruptcy.
The defendants included a group of collection agencies - Worldwide Asset Purchasing LLC, Worldwide Asset Purchasing II, West Receivable Services Inc. and West Corp. Worldwide and Worldwide II are subsidiaries of West Receivable, and West Receivable is an arm of West Corp.
Judge Clyburn dismissed the cases with prejudice, meaning they cannot be re-filed. The order also states that judgments in the cases are marked as "satisfied" and judgment liens are released.
"In the current recession, the District Court has seen an increase in the number of debt collection cases," Judge Clyburn said. "We have responded to many issues related to debt-buying, and we now have new rules in place that help make the process more transparent, give the judge more information and help level the playing field."
Defendants whose cases have been dismissed will receive written notification from the District Court of Maryland.
The class, represented by Maryland residents Wilson C. Winemiller Jr., Warren P. Adams and Mickey S. Slaghter, will receive $575,000 to be distributed among the class members, defined as residents of the state sued by the defendants between Sept. 22, 2006 and Sept. 22, 2009. As class representatives, Winemiller will receive $10,000 and Adams and Slaghter each will receive $7,500.
After attorneys’ fees and other costs of $231,970 are taken out of the fund, the rest will be distributed to the other class members who file claim forms. Class members will receive no more than $500 each, according to the settlement.