Is it LEGAL for debt buyer to BUY my old defaulted debt in Alabama and then sue me?
When you find yourself being sued by a debt collection company like Midland Funding, Midland Credit Management, Portfolio Recovery, or LVNV, one of the first questions that might cross your mind is whether this process is even legal. Is it lawful for a bank such as Credit One or Synchrony Bank to sell your debt to a debt collector? This is a very legitimate question to ask, and the answer might not be what you expect.
The Legality of Debt Buying
In many jurisdictions, including Alabama where I have been practicing and defending clients for 28 years, the answer is yes. It is legal to buy and sell debts, such as credit card debt or car repo debt. However, the more important question to ask is not whether the debt can be bought, but whether the debt was indeed bought by the company claiming to own it.
Proving Debt Ownership
When a company sues you claiming they bought your debt, the onus is on them to prove it. It’s not enough for them to simply state that they bought the debt. They need to provide evidence, especially when you’re at trial. The question is not whether they would have brought the lawsuit if they didn’t buy the debt. The question is, where is their proof that they bought the debt and that they still own the debt?
The Importance of Evidence
Often, these companies will present a bill of sale as evidence. However, this bill of sale is usually part of a larger document called the credit card purchase agreement. This document contains all sorts of rights, obligations, and disclaimers. It may even state that the company selling the debt does not claim that any of the information they’re selling is remotely accurate.
In most states, including Alabama, there is a legal principle known as the completeness doctrine. This doctrine states that if one party introduces part of a document as evidence, the other party can request the introduction of the rest of the document. This is particularly important in these purchase agreements because they often contain disclaimers about the accuracy of the information being sold.
The Right Battle to Fight
It’s important to focus your energies on the right battle. It’s not about whether it’s wrong or immoral for companies to buy and sell debt. The legality and morality of debt buying and selling are not in question. What you should focus on is whether the debt buyer can prove that they really bought the debt they claim to own. Not just that you owe the debt, but that they own the debt. This has been the basis of tremendous success in many cases over the years.
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