Is it legal for a debt buyer to sue me in a debt collection case Alabama?
A natural question when you are sued by a debt collector (such as Asset Acceptance, Cavalry, LVNV, Midland, Portfolio Recovery, etc) is “How is it legal for a company to buy an old debt and sue me in Alabama?”
Let’s look at this in a couple of ways.
First, is it legal for someone to buy your old debt?
Second, if it is legal to buy an old debt, is it legal for a debt buyer to sue you?
Third, if it is legal to sue you, what do you do now that you have been sued?
First, is it legal for someone to buy your old debt?
Yes.
Normally it is perfectly legal for one company, a debt buyer (debt collector), to buy a debt that you have.
Sometimes this is done while the debt is current. You may have seen your mortgage loan or car loan sold to someone else.
Often it is done when the debt has gone into default or even after it is charged off.
And it can be done years and years after you last used or paid on the debt.
The reason it is legal is a debt that you owe is an asset to someone else (whoever it is owed to) and they can sell that asset. Just like they could sell a car, a house, a pencil, etc.
The price that is paid for the debt will depend on the amount of the debt, how “collectible” the debt is, and other factors. Sometimes the debt is literally bought for “pennies on the dollar” but regardless of the amount paid for it, it is legal to buy debt in Alabama.
But is it legal to sue you on purchased debt? Let’s look at that now . . . .
Second, if it is legal to buy an old debt, is it legal for a debt buyer to sue you?
Yes if the law is followed.
Here’s what I mean.
There is nothing inherently wrong with a company that buys a debt to then sue you. But. So often these guys who sue you will break the law.
Here are some examples:
- Sue you after the statute of limitations has expired
- Sue you in the wrong county
- Sue you for an amount you don’t owe
- Sue you on a debt you don’t owe
- Sue you on a debt that the debt buyer actually does not own
- Sue you when the debt buyer has no intention of actually presenting evidence at trial
So it is true that there is nothing wrong (in and of itself) in a company buying debt and suing you, but just keep in mind that very often these guys will break the law and need to be sued in Federal Court for breaking the law.
But putting that aside, you have been sued. So what do you do right now? Keep reading my friend and let’s look at that now . . . .
Third, if it is legal to sue you, what do you do now that you have been sued?
Let me start by saying what you should NOT do — and that is to ignore the lawsuit.
We’ve all be there where we just hope that the bad thing will go away and resolve itself. Maybe (doubtful) this happens in normal life sometimes.
But it will not happen with a debt buyer lawsuit.
You need to take action — whether on your own or by hiring a lawyer, you must make sure you answer the lawsuit in time.
You have 14 days to respond in Small Claims or District Court from when you were served.
If you were sued in Circuit Court, you have 30 days from when you were served.
If you forget everything else in this post, remember to answer your lawsuit!
You have five options when sued — some of these you can do on your own and some you can hire a lawyer to help you. We help folks all over the state of Alabama and we’ll be happy to help you think through your options.
First, you can file bankruptcy by hiring a bankruptcy lawyer. This is normally a bad idea but rarely it is a valid option. You can imagine the short term and long term consequences of filing bankruptcy so we rarely recommend this.
Second, on your own, you can fight the lawsuit. This can be a legitimate choice in Small Claims or District Court but it is very difficult in Circuit Court. The advantage is you pay a lawyer nothing — the main disadvantage is you don’t have a lawyer on your side.
Third, you can settle the case without hiring a lawyer to help you. You save the attorney fees but you may not get as good of a deal as by hiring an experienced consumer protection attorney.
Fourth, you can hire a lawyer to fight the case for you with the objective to win. You need to know the cost of doing this and do you owe that money if you lose at trial?
Fifth, you can hire a lawyer to settle the case for you. You need to weigh the cost against the benefit of what the lawyer can do for you.
So which option is best for you?
I have no idea without talking to you — but we can chat by phone and help you discover the best answer for you very quickly.
Give us a call at 205-879-2447 or click the button below and we’ll be happy to help you.
Thanks!