Who Is This Stranger Harassing You for Old Debts? Probably a Junk Debt Buyer
Have you been getting debt collection letters and phone calls from an organization you don’t recognize?
Chances are your debt may have been sold to a junk debt buyer.
There was a time when a company might just give up on collecting debts, particularly small ones, if they couldn’t collect them easily. These days, if a company cannot collect a debt, they often just sell it to a junk debt buyer for pennies on the dollar. At some point, many companies today would like to get a little money rather than expend resources pursuing a hard-to-collect debt. As an added bonus, the original creditor can declare a loss on their income tax.
Is a Junk Debt Buyer the Same as a Debt Collector?
A junk debt buyer is not the same as a debt collector.
Junk debt buyers purchase debts for pennies on the dollar in order to collect on those debts. Once the junk debt buyer purchases the debt, the original creditor is no longer involved.
A debt collector is a company that collects debt payments on behalf of the company to which you owe the debt. In other words, your creditor may hire a debt collection company to collect payments on their behalf. In some cases, a junk debt buyer may even hire a debt collection company for this purpose.
It Can Get Even More Confusing
After your original creditor sells your debt to a junk debt buyer, it may not stop there. Your debt may be resold for an unlimited amount of time. When your original creditor sells your debt, they sell all rights to it at the same time. So, the junk debt buyer is free to turn around and sell your debt again if they can’t collect on it quickly.
What is the result? You may think a debt has been forgotten, then suddenly start receiving a barrage of letters and phone calls trying to collect. What likely happened is that whoever owned your debt sold it, and a new junk debt buyer is now trying to collect.
Another result is that the new owner of your debt may be more likely to violate laws and regulations that protect consumer debtors such as the Fair Credit Reporting Act, the Fair Debt Collection Practices Act.
Beware the Tricks of Junk Debt Buyers
Attempting to Collect Debts Beyond the Statute of Limitations
If a junk debt buyer contacts you about an old debt, it may be beyond the statute of limitations under Florida law. If it’s beyond the statute of limitations (generally five years in Florida but there are exceptions), that means you are not liable for the debt.
This often does not stop junk debt buyers. They may still try to convince you that you are liable for the debt. And if you bite and pay them something or make an agreement to pay, you have revived the debt and restarted the statute of limitations. And you have opened yourself up to a debt collection lawsuit.
Debt Reporting Re-Aging
Some unscrupulous junk debt buyers will report debts to credit reporting agencies as more recent than they really are. The result is a significant drop in your credit score. This is something you may see in conjunction with the transgression we just discussed of trying to collect on debts that have passed the statute of limitations.
And here’s the clincher. If you pay this old debt, it’s still going to play havoc with your credit because it will remain on your credit report for years as a delinquent debt that was more recent than reality unless you have it corrected.
Reporting the Same Debt More than Once
One of the problems with a debt being sold and resold is that each of the buyers and the original creditor may report the debt to credit reporting agencies. That means the same debt could turn up on your credit report several times. This will weigh down your credit score until you dispute the false credit reports and get them corrected.
How Do I Know if My Creditor Has Sold My Debt to a Junk Debt Buyer?
Your original creditor is not legally required to notify you when they sell your debt. Unless you follow up with your creditor about the debt and they tell you, you probably won’t know until the junk buyer tries to notify you or tries to collect.
Be aware that junk debt buyers often do not get all the documentation they need to prove the debt. And if they can’t prove the debt, they can’t win in court if you dispute it.
So be sure to send them a debt validation letter requesting the documentation that proves you owe the debt and they have the right to collect.
We’re Here to Help
If you are contacted by a junk debt buyer, be very careful. It’s not uncommon for them to take unethical and illegal actions. You need to understand your rights and protect yourself.
If you are unclear about any aspect of the debt and if it is not a small amount, you would be wise to at least book an initial consultation with a good Florida debt collection defense attorney.
Contact Ziegler Diamond Law: Debt Fighters a free consultation by submitting this form or just call us directly at (727) 538-4188 in Clearwater, (813) 225-3111 in Tampa or (352) 600-1326 in Mt. Dora.