Our law firm frequently handles cases involving disputes over outstanding debt obligations from third-party creditors. For example, one of our clients entered into an agreement with a creditor, who in turned sold that particular debt to a third-party collection agency. From there, all responsibility rested with the third-party to collect on the outstanding debt from the individual, although the third-party was reckless in its business practices.

Usually, the third-party creditor will file its motion for summary judgment to quickly collect the debt from an individual. A motion for summary judgment declares that all parties agree that there is no genuine dispute of material fact as to the allegations raised in the pending litigation.

Basically, the third-party creditor sues an individual for an outstanding debt they purchased from the original creditor, for pennies on the dollar of course, claims that the individual has no basis to dispute the outstanding debt, and ultimately collects on a balance that it not only bought severely below its market value, but also attempts to collect on a debt that could have been successfully challenged because of third party’s lack of custodial upkeep of the records, if not for an understandable lack of understanding on the part of the consumer.

In order for a third-party creditor to recover from an individual on an outstanding debt, there must be some kind of privity or special relationship. The most common form of privity a third-party creditor can have with an individual is a contract or agreement. When a third-party creditor does not have privity, such as a contract with the individual, the creditor’s options are extremely limited. A creditor’s last option is to get the individual to admit ownership of the debt.

Courts will only admit evidence into the record if:

“…(i) the record was made at or near the time of the event; (ii) was made by or from information transmitted by a person with knowledge; (iii) was kept in the ordinary course of a regularly conducted business activity; and (iv) that it was a regular practice of that business to make such a record.” Cayea v. Citimortgage, Inc., 138 So. 3d 1214, 1217 (Fla. 4th DCA 2014).

Creditors often cannot prove ownership of the debt. They either fail to keep accurate records or completely fail to obtain the original contract or agreement from the original creditor from whom they purchased the debt.

Nonetheless, third-party creditors will still attempt to collect on the debt from individuals, and are often successful.. Third-party creditors are known for routinely filing motions for summary judgment without having met their burden. One third-party creditor attempted to collect against our client in a civil matter, and submitted its Motion for Summary Judgment. We were easily able to successfully defend the matter, because the third-party creditor failed to authenticate its business records, failed to prove its ownership of the debt, and failed to provide records the debt was authenticate to begin with.

If you are being met wih third-party creditor overreaching, do not assume that their actions are otherwise justified.  Often times, they are not.

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