Believe it or not, just because a creditor sues you for a debt like a credit card or a medical bill, it doesn't mean that it can prove its case in front of a judge if you challenge it and take it to trial. The creditor still has the burden of proof, and sometimes they don't have the evidence they need to meet it. Why is that?
In these current economic times, creditors often do not sue debtors themselves if the account goes into default. More and more often they will sell it to a debt buyer (or "factor") at a discount and let them worry about collecting.
Outfits like New Century Financial, Midland Funding, LVNV Funding, or Cavalry Portfolio do this all the time. The problem is, even though the factor bought the debt, they aren't actually the creditor, and this can cause problems under the court rules of evidence.
Why Can't Debt Buyers Produce the Evidence?
Contracts, billing statements, and the like, which are necessary to prove the case, have to be verified as genuine and accurate business documents before the court in order to be accepted. This has to be done by a person with "personal knowledge" as to those facts. Credit card statements are the exception in NJ, as they are accepted on their face.
But what happens if you file an answer denying that you owe them anything (or at least the balance they are claiming is due) and you can articulate a specific dispute with the billing statement (e.g. unrecognized or unauthorized charges)? The factor would have to get someone from the original creditor to come to court or sign an affidavit as to the documents' accuracy.
Many times, however, the factor will not produce a witness at trial, either because they are out of state, the balance is too small to warrant it, or for any number of reasons. No witness, no case!
Even if they do produce a witness, that person will probably not have the requisite personal knowledge to testify as to the facts necessary to prove their case or lay a proper foundation for the documents necessary to get into evidence (i.e. seen by the judge). This would be fatal for the factor.
So What Do I Do?
Want to know more about what your creditors can and can't do? Then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!
If you live in southern New Jersey and are being sued by a debt buyer (or just don't recognize the name of the creditor bringing suit) for $8,000 or more, and want a lawyer to represent you to fight it or make a deal, call me at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.
I have represented creditors for many years and am familiar with the collection industry and how it ticks. Put my experience to work for you!