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Defending Yourself From Debt Buyers

If you owe money on an old credit card, medical bill, or other expense, you have likely been contacted by a debt buyer. Debt buyers purchase outstanding debts from the companies who are owed money.

While buying debts is perfectly legal, debt buyers often engage in shady business practices that flaunt the laws meant to protect consumers from harassing or threatening behavior.

How Debt Buying Works

When a person fails to pay a debt, the company that is owed the debt will first make its own attempts to collect. You may receive phone calls, emails, or letters attempting to convince you to make a payment.

If these efforts do not work, your account will be turned over to the company’s collections department. This department will report the delinquent account to your credit report, and will begin offering you settlements to pay off the debt. The collections department may also threaten litigation, or could sue you for failing to pay the debt.

After a while, the cost of the company’s collection efforts will outweigh the amount of the debt. When this happens, the company may sell that debt to a debt buyer for a discounted price. The company will recover some money in the sale, and will no longer have to spend time and effort trying to collect the debt.

For example, suppose you owe $1,000 to American Express on an old credit card. You haven’t made a payment on this card in years, and the account has long since gone into collections. A debt buyer could offer American Express $200 to purchase your $1,000 debt. Since American Express has likely given up on trying to collect this debt from you, it will accept the $200 and close out your account. Now, the debt buyer will pursue you for debt that it purchased. You will still have an obligation to pay the full $1,000 to the debt buyer even though American Express sold the debt for only $200.

Defenses Against Debt Buyers

The process above can take place multiple times. Debt buyers can purchase debts from each other, and your account may trade hands frequently before a debt buyer takes any action against you.

When a debt is passed around from company to company, paperwork can get lost. It is very common for debt buyers to lack the documents needed to enforce the debt. For example, a debt buyer needs to a person’s cardmember agreement to prove that you had a contract with the original creditor. If the debt buyer does not have this document, it cannot legally enforce the debt. However, some debt buyers may attach other documents to their demands that do not meet the legal requirements in an attempt to trick naïve consumers into giving them money.

Additionally, since the debt buyer does not have access to your original account records, it may not be able to prove that payments to that account were credited or billed correctly. When an attorney challenges the consumer’s billing history and records in court, the debt buyer may not be able to prove its claims.

Finally, the debt buying process takes time, and there is a possibility that the debt may no longer be collectible. In Florida, a debt must be collected within five years. If five years passes without any collection activity, the consumer will no longer owe the debt.

If you have been targeted by a debt buyer, it is important to remember that you may not legally owe the debt. Before you pay what you don’t legally owe, speak with an attorney who can advise you of your rights. At Loan Lawyers, our attorneys have years of experience fighting back against debt buyers and can help you create a plan to defend yourself.

To schedule your free and confidential appointment, contact us today by calling (888) FIGHT-13 (344-4813).

  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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