Defending Debt Buyer Claims
Handling Debt Buyer Claims
Facing a debt buyer's claim can be a challenging and stressful experience. Debt buyers purchase delinquent debts from original creditors or other debt buyers at a fraction of their face value and then attempt to collect the full amount from the debtor. If you find yourself in a situation where a debt buyer is pursuing you, it's essential to understand your rights and legal defenses.
This guide will provide an overview of how to defend against debt buyer claims and explore various legal defenses to help protect your interests.
-
Create a File and Request Debt Verification: One of your first steps when a debt buyer contacts you is to request debt verification. Under the Fair Debt Collection Practices Act (FDCPA), debt collectors, including debt buyers, must provide written verification of the debt, including the amount owed, the original creditor, and any supporting documentation. Send a debt validation letter to the debt buyer via certified mail with return receipt requested and review the material provided. Note an exaggeration or misstatement of a debt may violate the Fair Debt Collection Practices Act.
-
Statute of Limitations: The statute of limitations is the maximum time a creditor has to file a lawsuit to collect a debt. If the debt is beyond the statute of limitations in your state, it may be an effective defense.
-
Challenge the Chain of Ownership: Debt buyers may not have the proper documentation to prove they own the debt. Ask for documentation that establishes their ownership. For example, assume Citibank has a number of debts and debt buyer asserts it's the own of your claim and provides a general assignment. That may not show your account is included. Usually the debt buyer purchases accounts at a substantial discount and may not want to provide copies of its purchase document but they are part of the transaction so request them.
-
Seek Settlement: In some cases, it may be in your best interest to negotiate a settlement with the debt buyer. They might be willing to accept a reduced amount to close the account. Start low, explain hardship and problems. See a reduced amount of the claim and lower monthly payments. Ensure any settlement agreement is in writing and clearly states the terms of the agreement.
-
Hire an Attorney: If the debt buyer escalates the situation to a lawsuit and the claim is larger, consider consulting with an attorney experienced in debt defense. They can assess your case, advise you on legal strategies, and represent you in court if necessary.
-
Defend Yourself in Court: If a lawsuit is filed against you, be prepared to defend yourself. This may involve challenging the validity of the debt, questioning the debt buyer's ownership, and presenting evidence to support your position. Having legal representation is highly recommended in such cases.
-
Keep Detailed Records: Throughout the process, maintain detailed records of all communication with the debt buyer, including phone calls, correspondence, and payment receipts. These records can be valuable in building your case and ensuring your rights are protected.
- Know Your Rights: Familiarize yourself with your rights under the FDCPA and FCRA. Understanding the laws that protect you from unfair or abusive debt collection practices is vital to defending against debt buyer claims.
Defending against debt buyer claims can be challenging, but it's essential to know your rights and explore legal defenses to protect yourself. Requesting debt verification, reviewing documentation, challenging ownership, and understanding your rights are key steps in the process. If you find yourself in a lawsuit, consulting with an attorney is highly advisable to ensure you have the best possible defense.
Call (973) 598-1980 for a Free Consultation to Discuss Your Defense of a Debt-Buying Claim
