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Will the Real Creditor Please Stand Up? A Conversation About a Debt Buyer’s Ability to File A Collections Lawsuit

Posted by J. Edward Richards | Jul 20, 2021 | 0 Comments

Velocity Investments, Portfolio Recovery Associates, LVNV Funding, Midland Funding, Jefferson Capital Systems. Odds are that you may not have heard of these entities, and neither have many of our clients when they are served with a lawsuit against them. At their pre-trial conference, debtors often admit to owing debts to these entities because the debtor remembers using the original CareCredit account or Capital One credit card. The attorneys at Holland Law Group regularly encounter such secondary creditors, and this article will shed light on an important defense to collections lawsuits filed by debt buyers.

How can a lawsuit be filed against you by a debt buying entity you are unfamiliar with? The answer lies in two fundamental legal principles: standing and the real party in interest. Standing primarily addresses whether the debt buyer has a sufficient stake in the matter with a legally recognizable interest that would be affected by the litigation's result. See Weiss v. Johansen, 898 So. 2d 1009 (Fla. 4th DCA 2005); Kumar Corp. v. Nopal Lines, Ltd., 462 So. 2d 1178 (Fla. 3d DCA 1985).  Florida Rule of Civil Procedure 1.210 goes further, requiring that any action be brought by the real party in interest.  Creditors who have purchased debt from another party must prove their standing to bring the action as the real party in interest. Lawsuits are required to be brought by the real party in interest so that a defendant is protected from facing another lawsuit by different party. 

Using the Capital One credit card as an example, Capital One would generally have standing to sue a debtor who defaulted on his Capital One credit card payments. If Capital One has allegedly sold the credit account to LVNV Funding, then Capital One may have lost the ability to file a lawsuit to collect the outstanding debt. However, LVNV Funding cannot prevail in a collections lawsuit without being able to prove to the Court that it lawfully purchased the credit card account and has the acquired the right to file the lawsuit to enforce the debt. If LVNV Funding cannot provide sufficient evidence, then Courts can dismiss LVNV Funding's lawsuit against the debtor.

Across Florida, lack of supporting documentation causes debt buyers to lose their cases. Do not assume you owe a creditor money just because you recognize the original account. The experienced debt defense attorneys with Holland Law Group regularly analyze documents filed in our client's cases and hold debt buyers accountable for any missing exhibits, incomplete lists, and partially-executed agreements. We understand the workings of Florida law, can challenge the documentation in your lawsuit, and defend your case against debt buying entities. Holland Law Group serves clients throughout the state of Florida in Manatee, Pinellas, Broward, Miami-Dade, Sarasota, Orange, Hillsborough, and many other counties. If you have been sued by a secondary debt buyer, please contact us for a free consultation to discuss how we can fight the creditors on your behalf. 

About the Author

J. Edward Richards

Edward Richards is from Pensacola, FL. He received his J.D. from Mercer University, as well as a certificate fromthe school's prestigious Advanced Legal Writing Program. He returned to Florida as a prosecutor in Bradenton beforemoving to auto insurance litigation. Edward's focus in the high-volum...

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