If you're facing a lawsuit from a third-party debt collector, the plaintiff must prove that it legally owns the debt.
Most people don't know that American Express, Discover, and other credit card companies do not hold on to debts for very long. A consumer's debt is almost always sold to third party debt collectors, usually for pennies on every dollar owed by the consumer. For example, a consumer we represented had a credit card with Discover Bank, but was sued on that account by Portfolio Recovery Associates, LLC (“Portfolio”). The consumer was sued by a 3rd party debt collector. In this instance, Portfolio had to prove it owned the debt by producing documents such as an “assignment” of the debt to it from the original creditor.
Other important defenses that you should know about if you're being sued by a creditor:
- The debt doesn't belong to you.
- Statute of limitations: also known as, the debt is too old! We can help you determine what the statute of limitation is on the debt you're being sued for and if it's too old, we may be able to help you get the case dismissed altogether. Check out a favorable decision that Jennifer Rozen won regarding a statute of limitations decision here: http://courts.state.ny.us/Reporter/3dseries/2010/2010_50974.htm
- The amount of the debt is wrong. We can help you identify whether the creditor has added illegal charges to your account.