Beat first debt buyer in trial and then second debt buyer starts collecting — what do you do?

by

Beat first debt buyer in trial and then second debt buyer starts collecting — what do you do?

Let’s say you’ve been sued by Midland Funding or some other debt buyer. 

Midland sues you, you go to trial, and win your case. Great!

But then, Midland transfers your debt to LVNV or Portfolio Recovery or another debt buyer. 

Now the second debt buyer is coming after you. 

Maybe they sue you, maybe they are credit reporting on you, maybe they are calling and sending you collection letters. 

What do you do?

The way it works in Alabama, and I suspect most states are this way, when you beat that first debt buyer, this is a decision from the judge saying that you do not owe that debt buyer any money

What does this mean for the first debt buyer?

This means they better not be credit reporting. 

We need to look and see if they have violated the Fair Debt Collection Practices Act (FDCPA) when they sued you and when they credit reported. 

We can also use the Fair Credit Reporting Act (FCRA) to see if we need to do a dispute with the credit bureaus. Then, we see if the debt buyer tells the credit bureaus to leave it on your report. 

If they do leave this debt on your report, they are in violation of the FCRA and we can sue them. 

Under state law, this could also fall under malicious prosecution. 

Malicious prosecution is the idea that they sued you, but had no probable cause to sue you. 

They sued you with malice. 

How can we prove this? They typically don’t raise their hand and admit they have done this. 

We look at the case and point out that they had no evidence, no basis to sue you. 

Finally, if they transfer or sell that debt to another debt buyer, this is a violation of the law.

They know when they transfer it to a second buyer that the second buyer will come after you. 

All of these apply to debt buyer #1. 

What does this mean for the second debt buyer?

The FDCPA says that a debt buyer cannot collect any debt that is not owed. 

You went to court, and the judge said you do not owe this money. If you don’t owe the debt, they can’t collect it. 

This second debt buyer certainly has no right to collect.

So, we would sue the second debt buyer under the FDCPA. 

Whether they are calling, writing, credit reporting, or suing, they are breaking the law.

If they sue, we would defend it by saying, “Hey, look at this first lawsuit. We beat the first debt buyer so this second debt buyer can’t sue me.” 

This is basically an absolute defense because the judge has already made this decision. 

Again, we will also want to look at malicious prosecution, the FDCPA, and the FCRA when dealing with this second debt buyer.  

Specifically, we are talking about when the debt buyer has failed to prove their case. 

When you beat a debt buyer in trial you get an “adjudication on the merits.” This is where the judge says you do not owe the debt buyer this money. 

So, I’m not saying you beat them with a Statute of Limitations defense. That’s good, and it gives you a whole lot of options when suing the debt collector, but this is something different. 

When the debt buyer has failed to prove their case, look at the FDCPA, FCRA, and state law claim. 

Then, if someone else calls, writes, or credit reports on you after you have already beat that first lawsuit, they are basically begging you to sue them. 

If they are begging to be sued, who are we to deny them?

We hope this is helpful to you!

If you live in Alabama and you have any questions, feel free to get in touch with us.

We would be glad to help you in any way we can.

You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly. 

Thanks for reading, and have a great day!

-John Watts

 

 

Contact Information