What You Should Know About Debt Buyers
When it comes to the world of collections and collection lawsuits, there are basically two (2) types of creditors. The first is the original creditor. As the name implies, an original creditor is the bank or business entity that gave you a loan or extended you credit in the first place. For example, if you apply for and are given an American Express credit card, the original creditor is American Express.
The second type of creditor is the third party creditor or debt buyer. Though this business or corporation, it may even be a law office, never supplied you with a loan or extended you a credit line, it purchased the debt you allegedly owed to the original creditor. Typically, this only occurs after you default or miss many payments to the original creditor. Rather than sue you itself, the original creditor sells the right to the third party. Once your debt has been purchased, the original creditor no longer has any interest in the debt because it all belongs to the third party.
For this reason, third party creditors are often called junk debt buyers. They purchase portfolios containing thousands of old, defaulted accounts at a cost of only cents on the dollar. For the majority of these accounts, the original creditor(s) has already tried to collect the amount due unsuccessfully. The debt buyer then attempts to collect the full amount allegedly owed on the account (from you) using whatever means necessary.
As shady as it seems, this practice is entirely legal. However, you are at a greater advantage if a debt buyer is trying to collect from you or sue you, as opposed to the original creditor. Unlike most original creditors, the debt buyer will likely have a difficult time proving a number of required things, such as: ownership of your specific account, the true amount of the debt, when the debt was incurred, when the debt first became due, when the last payment on the account was made, etc. Without most of this information, the debt buyer will not be successful in a lawsuit against you to collect the debt.
Moreover, you should know that historically, third party debt buyers have been notorious for violating various provisions of the Fair Debt Collection Practices Act (FDCPA) and Telephone Consumer Protection Act (TCPA), especially the laws protecting consumers from unwanted communications and harassment. Aside from any alleged debt, debt buyers and their collectors who violate the FDCPA and/or TCPA may owe you money for damages.
If you are being harassed by a debt collector or have any other issue with creditors and third party debt buyers, you need the help of an experienced debtor rights attorney—like those at Fitzgerald & Campbell, APLC—to review your case and discuss your options with you. Our attorneys have decades of experience representing clients in all types of consumer defense cases and we are here to help you!
Call us today for a free consultation at (855) 709-5788, or email us at firstname.lastname@example.org