Every day people get sued for old debt they may or may not owe. How’s that? There’s a multi-billion dollar industry full of companies that do nothing but buy old dirt cheap consumer debt (like credit card, medical, or cell phone debt)—sometimes for as little as 2% of the value of the debt—to then turn around and try to collect 100% of that debt.
So the next question is: why is this old debt so cheap to buy? Because it’s “junk debt.” Junk debt is debt that the original creditor didn’t collect because there were problems with it. Maybe the debtor disputed some or all of the charges on the account. Or maybe the debtor already paid all or part of the debt, but the original creditor failed to properly credit the account. Or maybe the debtor was the victim of identity theft. Or maybe or the debt got so old that it is no longer collectible.
But they sue on these old debts anyway, because they want the money. In fact, most of the time they don’t have any intention of ever proving their case in court in order to get a judgment—they’re hoping the people they sue won’t ever respond or show up to court so they get a default judgment. Then, after they get the default judgment, they can use the courts to garnish your wages or bank account.
It’s a hell of a racket, and if you’re getting sued by a company you don’t recognize for some debt you allegedly owe, there’s a good chance you’re dealing with a debt buyer. And if that’s the case, it’s a good idea to give me a call to see if you have any defenses available. Sometimes, the lawsuit itself is a violation of the Fair Debt Collection Practices Act for which you can recover up to $1,000!