Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jan 20, 2020

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Many debt buyers purchase bad debt for pennies on the dollar and then do everything they can to collect it. In many cases, they don’t have details of the debt – which is why obtaining default judgments are their ultimate goal.

Steve Recordon, an attorney from San Diego, California whose firm represents individuals who have been sued or harassed by debt buyers, provided us with further details about why debt buyers seek to obtain default judgments:

When guys like me come along and challenge them to prove their case in court, they can’t. Occasionally they can, occasionally a judge will not understand the nuances of the assignments, that they’re assignees of the original debt. Let’s just take a Capital One credit card for example. The debt buyer is an assignee of that account. He may then try to collect, be unable to and assign it to somebody else. Now the next guy, or the guy even one step further removed, may file the lawsuit.

Recordon says that in order to prove up their case, they have to go back and be able to prove each assignment. However, he says that they’re generally not going to have the documentation to do that. He explained, “You may have a couple of debt buyers in between the original creditor and the debt buyer that actually filed suit. He can’t go to another debt buyer and say, ‘Give me your assignment stuff.’ All debt buyers protect the assignment information. Even if I try to get it through discovery in a case, they won’t give it to me. The reason Capital One won’t give it to me is that they can’t guarantee the accuracy of the accounts they assign. They’ll say that in almost every assignment and the debt buyer obviously doesn’t want that document floating around in court.”

Believe it or not, the original creditor may say that debt buyers can’t file lawsuits on these cases in the future. Recordon told us:

Well, they definitely don’t want that to come out as they file thousands of lawsuits on these assignments. Debt buyers very carefully protect the assignment documents and don’t produce the actual documents. They may produce a one or two paragraph assignment, but most assignment documents vary from 10 to 30 pages in length. So, they give you just part of it. Sometimes the judges are not familiar with these documents and will think that they’ve got the whole thing and say that the debt buyer has now proved the assignment, which in fact they haven’t. So, the default strategy is to eliminate all these problems.

If you’re being harassed by a debt collection company, contact an attorney to discuss your situation and evaluate your options. Consultations are free, without obligation and are strictly confidential. Click here to speak with an experienced debtor’s right collection lawyer who understands the Fair Debt Collection Practices Act (FDCPA).