Have you been sued by a company that you have never heard of? Chances are the suit was brought by a wholesale debt buyer. Companies like Midland Funding LLC and CACH, LLC do not loan money, or sell products or services, but will buy up large portfolios of charged off accounts, generally for pennies on the dollar, and often without significant documentation that they would be required to produce to prove up their case. They will then file debt collection lawsuits en masse. Depending on the jurisdiction they may have a hard time authenticating the documentation of another entity’s (or creditor’s) records or getting them admitted into evidence. Over half of all credit card lawsuits result in default judgments, and very few debtor defendants seek competent counsel. However, debtor defendants with competent counsel are often able to obtain to get positive results against the debt buyer.
I can never promise a particular result debt buyers will often fold when forced to produce documentation or get documents admitted into evidence. When I take on a case, I immediately look at some technical issues like: is the case filed in the proper court, or in the case of a lesser known debt buyer I look into whether or not they have the requisite third party debt collectors bond with the Texas Secretary of State. Part of my job as a debt defense lawyer is to get the collectors to put their cards on the table. At that point it is much easier to make an accurate assessment of whether we want to continue to fight the case, make a settlement offer, or have a conversation about bankruptcy. I rarely advise bankruptcy in a debt buyer case, but sometimes, based on the total picture of debt to income ratios, it might be the best alternative.
While this list is in no way exhaustive, the following is a list of common debt buyers:
Midland Funding, LLC
Portfolio Recovery Associates, LLC
Jefferson Capital Systems, LLC
Cavalry SP I
Equable Ascent Financial, LLC
North Star Capital Acquisition, LLC
Crown Asset Management LLC
Dyck O'Neal Inc.
Second Round Sub LLC
Investment Retrievers LLC
Velocity Investments LLC
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And while they are a story unto themselves:
National Collegiate student Loan Trusts