Money & Debt

You may have debt that you have not paid. If this is the case, the company that you owe may sell the right to collect on your debt to another company.  This would give the right to sue you from the original company to another company. 

Companies that buy old debts are called “debt buyers." For example, if you owe a TV dealer $300, they can sell the right to sue you to a debt buyer. The debt buyer could then sue you.

This is how you may be sued by a company that you’ve never heard of. You may also be sued by mistake, or because someone else made a purchase in your name or with your account and the bill was never paid in full.

Debt buyer definition

A debt buyer is the third party that bought your debt. They are the party that can now either collect from you or sue you. This is not the company or person you originally owed. Instead, it is someone who bought your debt from the party you initially owed.

A debt buyer still has to prove that they actually own the account if they sue you. The debt buyer can not lie to you or harass you. You may also write a letter to the debt collection agency and ask them to stop contacting you. Our Debt collector letter Easy Form program can help you write this letter.

After they receive this letter, a debt buyer can only contact you to tell you there will be no further contact or that they (or the creditor) are going to sue you. But, they should not contact you outside of that. If they do, you may have a claim under the Fair Debt Collections Practice Act. You could be entitled to damages from them, and you can probably hire a consumer advocate lawyer to represent you for free.

A debt buyer buys different types of debt but still must show evidence that they actually purchased the account. They must present accurate records to prove this. Learn more about your rights when dealing with debt collectors.

Debt owner

The company or person contacting you is probably the person who claims to own your debt. You can also find out who owns your debt by calling your original creditor and asking about settling your account. They should know who they sold your debt to. You can also review your credit report to determine if a known debt buyer has reported a collection account.

If you think the amount is wrong, you should dispute it with the credit bureaus and the debt buyer directly. All disputes should be done by certified mail or email to ensure a record of the dispute. You need to keep a record of it to help you if they claim your dispute was never received.

Responding to collectors

You have rights when dealing with debt collectors. You cannot be contacted at certain times or in certain places. If the company is suing you illegally, you may be able to sue them back.

Learn more in:

• Responding to debt collectors,
• Receiving a debt collection lawsuit basics,
• Responding to a debt collection lawsuit basics, and
• Discovery and motions in consumer debt cases basics.