Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.

As I have written here before, one of the symptoms of a bad economy is creditors selling off their old receivables to factors for pennies on the dollar.  These “vulture capitalists” then turn around and try to collect your debt to MasterCard for a big profit.  The only problem is that they may not be able to!

Companies like New Century Financial and LVNV Funding buy up lots of this debt and then file lawsuits in a scattergun approach to collection.  They are banking on the statistic that most people will not oppose the suit, and they will get a judgment by default.  The good news for you is that if you DO file an answer, they will often fold like a cheap suit.

This is because it is highly unlikely that they will be able to prove their case before a judge.  Basic laws of evidence require that business documents, like your credit card agreement and their bill, must be qualified by someone with personal knowledge of their authenticity.  The problem is that no one with the factor can do this!

A recent decision by the Missouri State Supreme Court really drives this point home.  It ruled that a debt buyer has to be able to properly prove it owned an account before it could try to sue to collect the debt.  It has to be able to provide testimony from the original lender on how the records of the account and transfer to the factor were prepared. 

In other words, they could rely on business records from other companies — but those companies needed to provide witnesses to testify how those records were created and kept in order to use them in court.  The debt buyer couldn’t simply use its own record-keepers — even if they knew how the bank usually did its work — to “authenticate” another company’s records.

If you are a New Jersey resident and suspect that a factor is trying to collect a debt from you, do not automatically assume that there is nothing you can do.  Call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your options.  You could be saving quite a bit of money

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