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Debt Buyers Beware!!

Debt Buyers Beware!!

You may have seen stories on the media of debt buying companies flooding the State's Courts System with collection lawsuits by the thousands. Not until recently, however, has anyone noticed the proof being attached to these Complaints. If you thought the "Robo Signing" scandal was big, nothing can compare to the outright deficiencies contained in many of the debt collection lawsuits being filed now across the Country.

For example, on many occasions judgments are obtained by way of an Affidavit. An Affidavit is a sworn document that states that the person certifying that a debt is valid and owed has personal knowledge of the facts that give rise to a Defendant's liability. These liabilities mostly result from credit card debt gone uncollectible. Typically, when a credit card company declares a debt uncollectible, instead of pursuing the debt in Court themselves, many times they will sell the bad debt to a collection company and assign the right to collect on that debt for cents on the dollar. A lot of times, collection companies will sell this debt down the chain to another collection company and so on. But remember, the original credit issuer has millions of accounts and many, many bad debts. The original bad debts are lumped into a pool of bad debt and sold off in huge chunks, typically tens of thousands of bad credit card debts at once. During this transfer, much of the original paperwork evidencing the original debt, for example the bill, is either lost, destroyed, or simply not attached. When this happens, the chain of proof needed to ensure that the Defendant is actually liability does not exist.

Well then how are these debt collection companies bringing suit? Well as has been happening during the assignment process, an alleged custodian of records for the receiving collection company will issue an Affidavit based upon information and belief that the debt is valid and that the Defendant is the proper liable party. But wait a second, Affidavits are based upon personal knowledge, not upon information and belief, in addition, how can the receiving collection company ever have personal knowledge that the Defendant is personally liable? Well, they cannot! Only the original credit card issuer possesses that knowledge and guess what, there rarely exists any Affidavit accompanying any of the bad debt transfers from the original creditor, not to mention any Affidavit from the original creditor accompanying these collection complaints.

As of October 1, 2011, new evidence rules have been established that require stricter proof by debt collection companies when pressing collection complaints. In Maryland, Chief Judge Ben C. Clyburn of the District Court of Maryland in September dismissed nearly 10,000 collection complaints presumably based upon a settlement of deficiencies described in this article, an additional 27,000 cases were dismissed when the collection firm Mann Bracken dissolved. Then in November, Judge Clyburn "stayed" or stopped nearly 3,800 collection cases brought by debt buyers LVNV and Resurgent Capital, again presumably because of deficiencies described herein.