A big business in America is the purchase of charged-off debts. The purchase of debt is legal, but the collectors must comply with collection laws. There are countless new businesses that buy old debts and then try to collect them. They often pay as little as a couple pennies on the dollar for the debt. Debt brokers may buy a one hundred million dollar portfolio for two million dollars, then re-sell it according to debts in a specific state, to smaller debt buyers. As proof of the alleged debt, these buyers may receive nothing more than a computer disk containing names of alleged debtors with an amount allegedly owed. This information may be flawed, or inaccurate. Nonetheless, you may receive calls from a company telling you that you owe them money. They may have no proof at all that you actually owe it, but make threats against you if you fail to pay them. This type of collector can be particularly dangerous and may operate outside of the law. Many fail to post bonds that they are required to post in order to lawfully collect consumer debts in Texas.
A trend is for debt buyers to file suit against consumers for old debts. These suits often misrepresent the amount owed, or are on debts barred by the statute of limitations. It is often a numbers game. They will sue on time barred debts, knowing that it is illegal, but also knowing that only a few people will hire a lawyer to defend the lawsuit, and fewer will file a counter claim. They consider counterclaims a cost of doing business and often make huge profits on their portfolios.
Under Texas law, anyone who purchases a debt at a time it is in default is a third party debt collector (collection agency.) These debt buyers must comply with the same laws as other third party collectors. They are prohibited from making illegal threats described above, must post a bond with the Texas Secretary of State, and they must provide a notice that you are entitled to a verification of the alleged debt if you request it in writing within thirty days of their first letter to you. It is important to note that if you happen to fail to request this information within thirty days, it does not mean that you have surrendered your rights to dispute the debt.Â If you feel you have been the victim of these types of abuse, or other types you feel were wrong, submit your facts now or call us.
One common ploy of debt buyers is to change the alleged date of last payment to make it appear that the statute of limitations has not expired. Fugate Law Office has represented many people who have not made a payment on a specific debt in more than four years, but the debt buyer has sent affidavits attached to lawsuits claiming that the last payment was made within the last four years. The adding of these fake payment histories is highly illegal, but often done anyway, and will help the debt buyer win the lawsuit if no one contradicts this false history. This is commonly known as re-aging.
If Fugate Law Office takes your collection harassment case ...
You will pay no attorneys fees, court costs, or expenses unless you recover. Fees on bankruptcy and debt defense are on a case by case basis.