Sued by a Debt Buyer in Florida?
You were served with a lawsuit, but you do not recognize the company suing you.
The name on the complaint may be completely different from the bank, credit card company, or lender you remember doing business with. You may recognize the debt but have no idea who the plaintiff is or why that company is demanding payment.
In many cases, the company suing you is a debt buyer—a business that purchased an account that was originally owed to someone else.
That does not automatically mean the lawsuit is valid. It also does not mean the lawsuit is invalid simply because the plaintiff purchased the debt.
The important questions are whether the company suing you has the right to pursue your particular account, whether the amount it claims you owe is accurate, and whether it can establish its claim.
What Is a Debt Buyer?
When a consumer falls behind on a credit card, personal loan, or other account, the original creditor may eventually charge off the debt.
A charge-off does not mean the debt has been forgiven or erased. It is generally an accounting event on the creditor’s books, and collection of the account may continue.
Some creditors continue collecting their own charged-off accounts or place them with collection companies. Others sell accounts to companies that purchase defaulted consumer debt.
Those companies are generally known as debt buyers and are sometimes referred to as junk debt buyers.
An account may be purchased directly from the original creditor, or ownership may change more than once before a lawsuit is eventually filed.
Buying consumer debt is legal. The fact that a company purchased an account rather than originally extending the credit does not, by itself, provide a defense to a lawsuit.
But when a debt buyer files a lawsuit, its right to pursue the particular debt—and the amount it claims is owed—can be important parts of evaluating the case.
Why Is a Company I Have Never Heard of Suing Me?
For many consumers, this is the most confusing part.
You may remember having a credit card with a major bank. Years later, you receive a summons from a company whose name means absolutely nothing to you.
That can happen because ownership of the account changed after you stopped making payments. The company that now claims to own the debt may therefore be different from the creditor that originally issued the account.
Not recognizing the plaintiff does not mean you should ignore the lawsuit. It means you should determine who is suing you, what account the lawsuit concerns, how much they claim you owe, and why they claim the right to collect it.
What Happens When a Debt Buyer Files a Lawsuit?
When a debt buyer files a lawsuit, you may be served with a summons and complaint identifying the plaintiff, the amount it claims you owe, and the basis for the lawsuit.
Do not ignore it.
Once you have been served, there is a deadline to respond. The summons should tell you when a response is required.
Failing to respond can allow the debt buyer to seek a default judgment. Once a judgment is entered, the creditor may have additional ways to pursue collection.
Responding to the lawsuit does not mean that you are claiming the debt was never yours. It preserves your ability to review the claim, raise any defenses that may apply, challenge the amount being sought, and consider whether defending the case or negotiating a settlement makes the most sense.
What Does a Debt Buyer Have to Prove?
A debt buyer does not automatically win simply because it filed a lawsuit.
Like any plaintiff, the debt buyer must establish its claim. Depending on the type of debt and the allegations in the lawsuit, important issues may include whether the account belonged to you, the amount allegedly owed, and whether the plaintiff has the legal right to pursue the debt.
When an account has been sold or transferred, the history of ownership may also be important. The company suing you may need to establish how it obtained the right to pursue your particular account.
The documents and evidence available to support the lawsuit matter. Some debt-buyer cases may be well documented. Others may present legitimate questions about ownership, the balance claimed, or the evidence supporting the case.
The point is not to assume that a debt buyer cannot prove its case. It is to make the plaintiff prove the case it filed.
Can You Defend a Debt Buyer Lawsuit?
Yes, depending on the facts. But there is no automatic defense simply because the plaintiff is a debt buyer.
Potential issues may include:
Wrong person or wrong account. The debt may not belong to the person being sued, or there may be an identity issue involving the account.
Incorrect balance. Payments, credits, adjustments, or other account activity may affect the amount actually owed.
Ownership of the debt. When an account has been sold or transferred, the plaintiff’s right to pursue the particular debt may need to be established.
Evidence supporting the claim. The documents and records supporting the lawsuit should be reviewed to determine what the plaintiff can establish.
Age of the debt. Depending on the circumstances, the timing of the lawsuit and any applicable statute of limitations may need to be considered.
Prior payment, settlement, or bankruptcy. A previous resolution of the account, payments that were not properly credited, or a bankruptcy discharge may affect the claim.
Other defenses may exist depending on the type of account, the history of the debt, and the allegations in the lawsuit.
The important thing is to evaluate your lawsuit and your account, rather than assuming every debt-buyer case is either an easy win or impossible to defend.
Can a Debt Buyer Lawsuit Be Settled?
Yes. Defending a lawsuit and negotiating a settlement are not necessarily competing strategies.
A consumer may have legitimate defenses and still decide that a negotiated resolution makes more sense than continuing litigation. Someone with fewer defenses may also be able to negotiate a settlement rather than simply allowing a judgment to be entered.
The right approach depends on the strength of the lawsuit, the amount being claimed, the creditor involved, and your financial circumstances.
A settlement may involve a lump-sum payment, payments over time, or another negotiated resolution. The terms vary from case to case, and there is no single settlement strategy that makes sense for everyone.
Experience Matters When Negotiating With Debt Buyers
I have handled thousands of consumer debt settlements and regularly negotiate with creditors, debt buyers, collection companies, and the law firms that represent them.
That experience matters because these cases are not resolved in a vacuum. Different plaintiffs and collection law firms may approach litigation and settlement differently, and the posture of the lawsuit can affect the options available.
The goal is not simply to get a settlement. It is to evaluate the lawsuit, any available defenses, and the settlement opportunity together to determine whether the proposed resolution makes sense.
Sometimes the best strategy is to defend the lawsuit. Sometimes settlement provides the better result. And sometimes both happen at the same time—defending the case while exploring whether it can be resolved on acceptable terms.
What Happens If the Debt Buyer Gets a Judgment?
If a debt buyer obtains a judgment, the case can move from determining whether money is owed to collecting the judgment.
Depending on the circumstances, a judgment creditor may have several collection options available under Florida law. Those can potentially include attempting to garnish funds in a bank account or garnish wages, subject to exemptions and other protections that may apply.
A judgment therefore should not be treated as simply another collection letter. It can give the creditor additional legal tools to pursue payment.
Even after a judgment has been entered, however, exemptions, settlement options, and other issues may still need to be considered depending on the circumstances.
The better approach is to address the lawsuit before it reaches that point whenever possible.
When a Debt Buyer Lawsuit Is Part of a Larger Debt Problem
Sometimes a debt buyer lawsuit involves one old account that needs to be defended or resolved.
Other times, it is one part of a much larger financial problem involving multiple credit cards, collection accounts, lawsuits, judgments, or other debts.
When several debts are involved, resolving one lawsuit may not solve the underlying problem. Paying or settling one debt buyer does nothing to prevent another creditor from pursuing its own account.
In that situation, it may make sense to evaluate the entire financial picture rather than dealing with each creditor one at a time.
Bankruptcy may be one option. Chapter 7 or Chapter 13 can address many types of consumer debt, including debts that are already in collection or litigation. Whether bankruptcy makes sense depends on your income, assets, debts, and overall circumstances.
The goal is to determine the best strategy for the problem as a whole—not simply react to whichever creditor filed the latest lawsuit.
Talk to a Florida Debt Buyer Lawsuit Lawyer
If you have been served with a lawsuit by a debt buyer, do not ignore it simply because you do not recognize the company suing you.
The underlying account may be familiar even though the plaintiff is not. The lawsuit should be reviewed to determine what debt is involved, how much is being claimed, whether the plaintiff has the right to pursue it, what defenses may apply, and whether settlement should be considered.
Shmucher Law represents Florida consumers in debt buyer lawsuits and other debt collection cases. With 16 years of experience handling consumer debt matters and thousands of debt settlements, we can evaluate both the lawsuit and the practical options for resolving it.
Contact Shmucher Law today to discuss your debt buyer lawsuit and what to do next.