Top 8 questions about debt buyer defense
What you should know when a debt buyer contacts you
After a lawsuit is filed, I make the debt buyer prove that it owns the debt. If the debt buyer can’t prove that it owns the debt, it has no right to sue anyone.
What is a debt buyer? How do people generally interact with a debt buyer?
Federal regulations require that whenever payments on a credit card account become overdue by more than 180 days, the account must be “charged off,” that is, deemed uncollectable. This means that the card issuer can no longer consider the loan to be an asset. To get these “bad assets” off their books, credit card companies sell them to debt buyers.
Typically, debt buyers buy these “charged off” accounts by the hundreds or the thousands, often paying as little as $0.04 or $0.05 on the dollar amount owed. Then, the debt buyers file lawsuits to try to collect as much money as they can from those accounts. In addition to credit card accounts, this process also applies to other kinds of unsecured personal loans (such as loans made over the internet).
How will I know if I am being sued by a debt buyer?
If you’ve never heard of the company suing you, you’re probably being sued by a debt buyer. Debt buying companies sue in their own names because they own the debt. This is confusing for the people being sued because they don’t understand why an unfamiliar company is suing them.
Unless you read (and understand) the details of the lawsuit (once it’s been served on you), you might easily assume that it doesn’t have anything to do with you because you don’t recognize the company suing you. And THAT is a big mistake.
How can someone discover the details of the debt for which they are being sued?
A careful reading of the complaint will reveal a statement whereby the debt buyer states from what credit card company it bought the account. In Illinois, the Supreme Court rules require an affidavit stating the identity of the original creditor to be attached to any debt buyer lawsuit. This includes not only written-off credit card accounts but also unsecured personal loans. It’s clearer than it used to be, but it’s still confusing to a lot of people.
How long do I have to respond to a debt buyer’s summons?
A summons is basically a “cover sheet” to the lawsuit (the complaint). It tells the person being sued (the defendant) who it is that filed the lawsuit (the plaintiff), how and where the defendant must respond to the suit, and by when the defendant must respond. In Illinois, the time to respond can be as little as three days.
What happens if I fail to respond to a debt buyer’s summons?
If you fail to respond to a summons, a default judgment will ultimately be entered against you. A judgment is an order that you pay the full amount of the debt plus the court costs and, in some cases, the attorney’s fees of the debt buyer. Once a judgment is entered against you, the debt buyer can start enforcement proceedings against you, such as a levy on your bank account or wage garnishment.
What type of debt do you see more often than others?
Most of the debt we see is credit card debt, but also auto loans, student loans and online loans.
Is there a certain statute of limitations in Illinois on debt?
In most credit card cases, the statute of limitations is five years and one month after the most recent payment by the debtor.
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