The first question in defending a collection lawsuit: Original creditor or debt buyer?
The first question in defending a collection lawsuit: Original creditor or debt buyer?
When I get a phone call from a prospective client who is being sued over a credit card debt or an automobile loan, the first thing I want to know is whether he or she is being sued by an original creditor or by a debt buyer. In an original creditor case, the plaintiff (the company suing you) is the same company that extended you credit (issued the credit card or lent you money). In a debt buyer case, the company that issued you the credit card or lent you money has sold your account to a third party.
American Express, Discover Bank, and Capital One are original creditors that actively sue people to recover on delinquent accounts. These companies rarely sell their accounts to third parties. In fact, Capital One is by far the credit card company most likely to sue its former customers over credit card debt.
However, many creditors sell their delinquent accounts to debt buyers. In Cook County, debt buyers such as LVNV Funding, Portfolio Recovery Associates (PRA), Midland Credit Management, and Cavalry SPV file thousands of lawsuits every month to collect on delinquent accounts they have purchased from the original creditors.
It’s a perfectly legal way of doing business, and it has major implications for your case. Fortunately, most of those implications are good for consumers who hire experienced counsel to help them in these cases. Below, learn how lawsuits by debt buyers often play out in court.