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NCBLC - National Consumer Bankruptcy Litigation Center

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Debt Purchasing Companies

It's perfectly legal for one company to buy a valid debt from another and attempt to collect on that debt. However, the means many debt purchasing companies use are illegal, and in recent years the Federal Trade Commission has commenced action against a number of debt purchasing companies that have used abusive and deceptive practices to collect debts. Many of these debts are not even valid.

For instance, some debt purchasing companies buy up debts that are too old to collect legally, or that have been discharged in bankruptcy, and attempt to collect those debts. They may also report them to the credit bureaus, even though the original debts are too old to be legally reported or have been discharged in bankruptcy.

These debt purchasers generally are not innocent purchasers who have received debts they don't know are invalid. Instead, many companies build their businesses and their revenues around efforts to collect these invalid debts. Because the original creditors know the debts aren't collectible, they're willing to part with them cheap.

Once the debt purchasing company owns the debt, it may aggressively pursue collection. If you receive a collection call on a debt that has been discharged in bankruptcy, you'll probably realize that you no longer owe the money. But many debt purchasing companies will lie to you; they'll say that because they own the debt now and they weren't listed in the bankruptcy, you still have to make payment, or that these are additional fees that weren't covered in the bankruptcy discharge. If the debt is simply too old to be collectible, you may not know that the statute of limitations in your state precludes collection.

Other debt purchasing companies won't contact you at all. They'll simply buy up the debt, report it to the credit bureaus, and sit back and wait for you to apply for credit. These companies know that if you're applying for a mortgage or other important credit, you'll be eager to get the issue resolved and get your credit report cleaned up. Making payment is much faster than disputing the item, and so they're playing the odds, hoping that you'll settle the debt just to get it over with.

Don't let these companies mislead you into paying debts that you no longer legally owe. If your debt has been discharged in bankruptcy, NCBLC may be able to help you reopen your bankruptcy case to enforce the discharge injunction. Fill out our free case evaluation form right now and find out how we can help! If the debts in question are simply too old to be collected legally, have been paid off, or there is some other discrepancy, contact an attorney, the consumer protection agency in your state, or the Federal Trade Commission and fight back!

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