Say you had an illness and racked up some medical bills. Your insurance covered most of them, but not all. You paid most of them, but there were a lot and maybe one slipped through the cracks. Then you open up your mail one day and find you’re being sued over the bill by some company you’ve never heard of before.
Once a bill becomes past due, it can become hard for a consumer to keep track of exactly who it is that they owe. The original creditor may send the bill to a collection agency, or they may sell it to a debt buyer. In the first instance, you technically still owe the original creditor (the hospital where you were treated, or example) and the collection agency is just working on the creditor’s behalf. But in the second case, the original creditor has washed their hands of the bill and the debt now is owned by someone else entirely. The hospital may have sold the debt for pennies on the dollar and then written off the balance. They often don’t notify you that the debt was sold. Usually you don’t find out until you start getting calls or even lawsuit papers from the debt buyer.
It may not seem like much of a difference to the consumer since you still owe the debt regardless of who owns it. But it can make a difference if you’re being sued whether the debt is owned by the original creditor or if they sold it to someone else.
The Ohio State Bar Association says that debt buyers often don’t have good documentation of your debt and adequate proof that they actually own it. They just file lawsuits on the theory that most people won’t even respond. They get a default judgment and then garnish your wages to get their money.
There are a lot of ways that an experienced consumer attorney can defend you against a lawsuit by an original creditor. But there may be even more defense tactics available when the company that filed the lawsuit is a debt buyer. Potential defenses to look at include lack of documentation of the actual debt, lack of documentation of the chain of title, and evidentiary defenses such as hearsay.
But when you’re sued by a debt buyer, you may have a chance at fighting the lawsuit if in fact they don’t have sufficient proof of the debt. At the very least, that may present an opening to negotiate a settlement.
Whether the debt was sold also can make a difference if for some reason the original creditor comes back and tries to collect. If the original creditor sold the debt, they no longer have any legal right to collect it from you. Instances of that happening are pretty rare, but it’s something to be aware of.
If you’re being sued or harassed by a creditor, call Luftman, Heck & Associates Consumer Law attorneys today at (888) 726-3181 or email us at email@example.com.