What Do You Discuss With Clients Who Are Being Sued By A Bank Or A Creditor?

The biggest thing to get past with clients when they come in is to talk them out of trying to justify why they owe the money in the first place. People are sensitive to that, so I have to say to them, “it doesn’t matter what you owe or what you think you owe. What matters is what they can prove that you owe.” I have to get them to view the case as a lawyer does. Common questions I ask in the first meeting are, “Did you actually sign any documents, and if so, do you have them?” or “How long ago was the credit card charged, and was the purchase made against the balance on the card?”

What Is The Difference Between A Debt Buyer Versus An Original Creditor? Is It Important For The Debtor To Know?

It is important for a couple of reasons. The original creditor, for instance, has taken some loss dollar for dollar. So, if you owe them $5000, that’s money that they have put out. If you are dealing with a debt buyer, they’ve probably purchased that account for 2 cents on the dollar in Texas. So their exposure is lower in the end, which is important because generally when you are talking about negotiating a settlement, they are willing to take a much bigger cut or compromise in the amount of debt to settle the case.

It is also important because debt buyers buy accounts in bulk. They buy thousands of accounts in each transaction. To prevail at trial, they have to be able to prove that they own that account, and the right to proceed forward with that account. So, I can’t sue you for the money that you owe to my neighbor. That’s up to my neighbor to do it unless he sells that account to me, and then I can do it. So, I’ve got to prove that I purchased the account, am now the owner, and have the standing to proceed with the case.

In some cases, there are several of those transactions before somebody sues on that account. If they’ve sold that account three or four times, they’ve got to be able to trace that account from its original owner through every one of those transactions in the created chain of title before they claim the right to collect it. The last reason why it’s important to know whether you are dealing with a direct creditor or a debt buyer is that the documentation doesn’t necessarily follow when they sell these accounts.

So, usually, you have an easier time defeating a debt buyer because they don’t have their evidence together and can’t prove the debt. They can’t prove ownership of the debt because they don’t have the documentation. Those are the three primary reasons that differentiate between a debt buyer and an original creditor.

Why Do Creditors Sell Debts To These Debt Buyers?

Partially because they are cutting their losses and getting them off the books, I assume it has more to do with removing the losses from their records than to do with the legalities moving forward.

When Is A Bank Or A Creditor More Likely To File A Lawsuit Against Me?

It’s different for different creditors. Some creditors file suits reasonably quickly. Most credit card companies and creditors will usually wait a couple of years before filing a lawsuit against an individual for non-payment and will go through several levels of attempting to collect it informally. However, in Texas, you have up to four years to sue on a contract, which is generally the case we deal with here. So, suppose you are going to get sued. In that case, you will get sued somewhere between two years and four years of when that claim accrues. In the first meeting, I always ask the person when the last time they used that card was. It helps us mark when the clock starts ticking when somebody has to file a cause of action and beat the statute of limitations.

For more information on Bank/Creditor Lawsuits In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (940) 440-5250 today.