Can a Debt Buyer Really Sue Me?
This question is a natural question when you have been sued by some debt buyer such as LVNV, Midland Funding, Portfolio Recovery, etc.
First off, it is completely legal to buy debt
Companies are allowed to buy old credit card debts, and other debts as well. The most common are deficiencies after the repossession of a vehicle or a deficiency after a foreclosure.
But remember there is a big difference in it being legal to buy a debt and the actual proof that the company suing you literally bought your old debt.
The debt buyer has to prove ownership of the debt
It may be legal to buy the debt, but the debt buyer has a responsibility to prove that they own the debt now that they have sued you.
Think about your car or your home — you prove ownership through a chain of title.
When you buy a house from someone, you want to make sure the person you bought it from had a “good title” on the house. This is why we have title insurance and do a title search.
The company suing you on an old debt may be the fourth, fifth, or sixth person to supposedly buy this debt.
They prove it by showing the proof where they bought the debt and the company they bought it from owned the debt. In other words, if I sell you the Golden Gate Bridge — you can prove you bought it from me, but I never owned it so I had nothing to sell to you.
Even then you have to keep going back all the way until you get to the original creditor.
Many debt buyers cannot– or will not– prove ownership
Now, in some ways we don’t care because if they don’t prove the ownership, they should lose their case.
They complain and whine and fuss about having to prove ownership. They want the court, and you, to just believe them because they sued you. That’s not proof of anything other than they sued you.
Even if they prove ownership, their lawsuit may be outside the statute of limitations
I’ve been working in this area of the law for many years and don’t see them proving ownership.
But let’s be generous and assume they can prove ownership, they may still lose because they waited too long to sue. This is a statute of limitations defense.
Suing may be legal in general, however the lawsuit against you may actually be illegal under Alabama or Federal Law.
Under Alabama law, if someone sues you with no proof, this is often called a malicious prosecution and we sue a lot of debt buyers for breaking this law.
Suing you with no proof at court can also — and normally does — violate the Fair Debt Collection Practices Act, or FDCPA, because they brought a bogus lawsuit or waited too long to sue you under the statute of limitations.
It may be that they have no way to prove ownership.
They might even be suing you for more than you owe.
There’s all sorts of reasons why the lawsuit may be illegal in your case.
Find out your rights and 5 options– these are so much more than simply bankruptcy
So many people, when they’re sued, think that bankruptcy is their only option — often because that is what everyone tells them they have to do.
That’s just bad advice.
Bankruptcy is just one option.
You have 4 other options, which gives you a total of 5 options.
What a relief to know that you may have multiple options, right?
Feel free to contact us
If you live in Alabama, and you have a specific question for us, feel free to get in touch with us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you as soon as possible.
Have a great day.