Can A Collection Agency Sue Me In The State Of Alabama?
Can A Collection Agency Sue Me In Alabama?
We often talk about debt collectors suing Alabama consumers but to be precisely correct, a collection agency that does not own the debt cannot sue you in Alabama. A collection agency must own the debt to sue you in Alabama.
“Debt collector” means a collection agency which collects a debt for someone else; it means a debt buyer who claims to have bought the debt; and a collection law firm which is a law firm that collects or files suit on debt.
Alabama law requires that the company actually suing you — the Plaintiff — own the debt.
Sometimes we have seen companies sue when they do not actually even claim to own the debt. For example, Cavalry or Unifund have sued but admit that a related entity actually (allegedly) owns the debt.
This is not proper.
A collection agency or a company which merely “services” the debt (for example Midland Credit Management) can certainly collect on a debt but it cannot file suit in its own name.
This is why, for example, that Midland Funding, LLC files suit in Alabama and not the collection arm of Midland Credit Management.
So when a collection agency threatens to sue you, it is wise to ask “Who will sue me? You or someone else?”
If the collection agency says it will sue you, and it does not own the debt, this is often a violation of the Fair Debt Collection Practices Act (FDCPA).
The reason is the collection agency is lying to you and threatening to do something that it is not legally able to do.
Both of these are serious violations of the FDCPA and may entitle you to money damages.
If you live in Alabama and want to know more about your rights, fill out our contact form.
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We will be glad to help you figure out your best course of action.
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