What is a Debt Buyer?
A debt buyer is a company that purchases debts from a creditor, lender, or another debt buyer, and attempts to collect on the debt. These companies purchase the debt for a small percentage of the face value of the debt. Debt buyers can be collection agencies, law firms, or private investors.
What is an Original Creditor?
An original creditor is the company that gave you the loan or credit in the first place. An original creditor may attempt to collect a past due debt or account itself, or it may hire a debt collector. A debt collector is generally a third party who has been contracted to collect your debt or account. Do not confuse a debt collector with a debt buyer (sometimes called a “third-party debt collector”). Remember, a debt buyer has actually purchased your account, whereas the debt collector is working on behalf of the creditor, who still owns the account.
Why does it matter whether I’ve been sued by a Debt Buyer or the Original Creditor?
In all debt collection lawsuits, it is important to determine whether you have been sued by an original creditor or by a debt buyer because the defenses will be much different.
It is much more difficult to win a lawsuit against an original creditor because they have access to all of your account documents, and therefore, they have the correct paperwork to prove their case in court. A debt buyer usually has a much more difficult time winning a lawsuit because they often lack the necessary documents that they need to prove you owe the debt and that they own the debt.
Why is it difficult for a Debt Buyer to prove their case?
In order to win a lawsuit in Georgia, a debt buyer needs to prove two things in court:
- You owe the debt;
- They own the debt.
You would think that meeting these minimum requirements should be easy when you clearly took out the credit card and used it. However, a debt buyer’s business model is to buy debts for as little as possible, thereby enabling it to maximize profits when it collects. To get the lowest price possible on the accounts it purchases, the debt buyer only buys the bare minimum amount of information needed and in the most cost-effective format. The debt buyer usually gets a simple computer file containing the name and address of the account holders, the account numbers, the balances due, and the last date of use on the accounts. Debt buyers have the option of buying additional documentation and information, but it costs them a lot more, so they usually don’t do it. Spending the additional money does not make sense for the debt buyer because they know they cannot collect on all of the accounts they purchase – account holders may be hard to find, may have filed for bankruptcy, may have passed away, or they may just not have any money or assets.
As a result, the average debt buyer is usually unable to prove that you owe the debt because they did not purchase any account application or other documents to show that you opened an account and accrued the debt. They are also usually unable to prove that they own the debt.
However, a debt buyer’s business model also counts on the fact that most of the people they sue either do not answer the lawsuit, or they defend the case on their own. Therefore, in the vast majority of the lawsuits they file, they are able to win without ever being required to produce the correct paperwork, which they probably do not have.
So, while a debt buyer may claim to be the current “owner” of you debt, the debt buyer is usually unable to produce the proper legal documents that are necessary to prove their case in court, even if it seems that they have attached official-looking documents to the lawsuit. You need an experienced attorney to review the debt buyer’s documents in order to determine whether they will hold up in court.
How do I know if I’ve been sued by a debt buyer?
In order to determine whether the plaintiff in your case is the original creditor or a debt buyer, you should look at the top of the first page of the lawsuit. If you don’t recognize the name of the company suing you, or if the plaintiff is listed as something like “Cavalry SPV I, LLC as assignee of Citibank, N.A.” then you have probably been sued by a debt buyer.
List of Debt Buyers
- LVNV Funding LLC
- Calvary Portfolio
- Calvary SPV LLC
- Cavalry SPV I, LLC
- Midland Funding, LLC
- Portfolio Recovery Associates
- CACH LLC
- Equable Ascent Financial
- Asset Acceptance LLC
- Jefferson Capital Systems
- Hudson & Keyse LLC
- Atlantic Credit and Finance
- Bluebonnet Financial LLC
- Unifund CCR Partners
- Unifund CCR, LLC
- Arrow Financial
- Troy Capital LLC
- NorthStar Capital Acquisition
- Integras Capital Recovery LLC
- Autovest LLC
- Pharia LLC
- Harvest Credit Management
- NCEP LLC
- Crown Asset Management
- Samara Portfolio Management
List of Original Creditors
- Citi Citibank
- Capital One
- FIA Card Services
- Bank of America
- American Express
- Target National Bank
What should I do next?
If you have been sued by one of these companies, or by any other company, you need to be sure you file an answer to the lawsuit by the deadline. The deadline to respond to a lawsuit in Georgia is thirty (30) days from the date you were served with the lawsuit.
You should consult an attorney immediately if you have been sued. (link underlined to Contact Us page). If you fail to respond to the lawsuit, the plaintiff may automatically obtain what’s called a default judgment. This allows the plaintiff to get a FiFa, which then allows them to garnish your paycheck and bank accounts, or levy your property.
Hiring an experienced debt collection defense lawyer can help you eliminate or reduce the claims against you. Even if you’ve already filed an answer, we can help you. Give us a call at 404-594-5130 or email us at firstname.lastname@example.org for a consultation.