Debt Buyer Lawsuits - Defense Strategies

Posted By Law Office of Simon Goldenberg, PLLC || 6-Apr-2016

Many lawsuits, particularly with old debts, are brought by "debt buyers" who purchase debts from original creditors. Such "debt buyers" might have difficulty proving in court that they own the debt, that the debt ever existed, or that you owe the complete amount claimed. Furthermore, even if they could prove these things, "debt buyers" sometimes seek to collect debts after the statute of limitations has expired. One strategy sometimes used by debt buyers is to try to convince the debtor to make a small payment on a very old debt, because doing so can restart the statute of limitations. Be wary about making any commitment to pay on a debt that is more than six years old in New York.

These "debt buyers" ground their business model on the assumption that most consumers will not hire an attorney and fight the lawsuit. They count on obtaining "default judgments" without having to ever prove their case. If you hire an attorney to aggressively defend the debt lawsuit, it may be possible to get the case dismissed, or to achieve a substantial reduction in a settlement. Moreover, if the debt buyer is bringing a lawsuit to collect on an a time-barred debt, or otherwise commits an unfair practice or violation of consumer laws, you may be able to fight back by claiming damages from the debt collector in a federal lawsuit.

As of 2016, our office has seen activity with the debt buyers listed below whom are known to initiate a large amount of lawsuits in New York and to have obtained a large amount of default judgments in prior years.

Credit Card Debt Buyers:

  1. Midland Funding
  2. LR Credit, LLC
  3. Portfolio Recovery Associates
  4. LVNV Funding

Student Loan Debt Buyers:

  1. Arrowood Indemnity
  2. United Guaranty
  3. National Collegiate Student Loan

Debt Buyers that collect on credit cards, student loans, and other debts:

  1. Cavalry SPV I LLC
  2. Cach, llc

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