What is the difference between being sued by an original creditor and being sued by a debt buyer?
First, lets discuss the difference between a creditor and a debt buyer.
A creditor is the original party to whom the money is owed. Examples include Capital One, CitiBank and Discover Card. When you open a credit card with Capitol One, Capitol One is the original creditor. They often will hire a lawyer to represent their interests in court. This does NOT mean that it has been sold, but that they decided not to represent themselves in court.
A debt buyer is where a creditor has sold the account to another agency, who then collects or sues. Examples here would be a debt originally owed to Wells Fargo, in which Midland Funding now owns the debt. Midland is a debt buyer. Wells Fargo is an original creditor.
Now we shall discuss what happens with a lawsuit filed by each. Note that this applies ONLY to cases that get to trial. If you default, the judge will rule against you in most cases. The exceptions are few.
A lawsuit filed by an original creditor requires that there is some showing of relationship between you and the creditor, and that you owe them money. An example is that you opened a credit card, and used the credit card, and there is still a balance due. Another example is buying on a store card. You go in to the store, buy products, and they sell them to you on credit. These might be called contracts or open accounts, depending on your jurisdiction.
A lawsuit filed by a debt buyer requires a different kind of proof. It requires everything that a creditor lawsuit requires, and proof that the debt buyer now owns the account. But the debt buyer cannot testify that you opened the account, and they cannot testify that there is a balance still owing. That would be hearsay, which is a statement (other than one made by the person while testifying at the trial or hearing) offered in evidence to prove the truth of the matter asserted. (in this case, this definition comes from Federal Rule of Evidence 801, but similar definitions can be found in most states rules of evidence or case law.)
So somehow, the plaintiff must prove that you opened the account, and left a balance. And then they must prove that they bought that account. All without using hearsay.
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