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"The right to contract shall be preserved"??


TwoCents
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The Right to Contract...

Hello everyone…..My forum name is TwoCents.

I'm sorry to say that I have little to offer since I'm new to this subject its hard to take without giving but I am willing to learn and perhaps someone in the future can gain from my learning or experiences. I have read several posts here and find them quite interesting and it sounds like this group knows what they are talking about. I'm not familiar with how forums work so I hope I get this posted correctly.

Here's the situation I'm helping a friend [let's call her Sally] who has current medical problems and out of work. She has a credit card debt obligation with the original creditor/credit card. In the card agreement it says that she will be responsible to the original creditor for legal expenses and costs should they sue her or HIRE someone else to sue. Neither occurred but apparently the Original Creditor sold the debt to another party [Let's call him John]. Sally had an agreement with the Original Creditor however she has not signed any agreement/contract with John whom they sold the debt to.

Now I can understand if the Original Creditor needs capital for his company and John offers to buy the debt perhaps for less than the debts face value and I would assume a contract is signed by, the Original Creditor and John during the sale/purchase.

Sally signed an agreement with the Original Creditor. Who is Sally liable to OC or to John?

Can Sally's right to contract be dismissed by the Original Creditor and sell her debt over to John? What law gives him the right to do this? Does that law supercede the authority of the Constitution?

I believe that the Constitution says that, "the right to contract shall be preserved" wouldn't that mean that Sally's contract is still with the Original Creditor? If one can change the person to whom another is liable that doesn't seem to be preserving our right to contract. What would be the sense of having a contract if one party can change it without the others consent? I may be missing something here.

To Continue with the story:

John sent a gentleman to Sally's home serving her with a Verified Complaint, an Alias Summons, Credit Card Agreement [Default & Termination of Agreement paragraph] an affidavit from John saying he bought the debt. There was a paragraph at the bottom of the complaint that said Sally has 30 days to dispute/ request validation which she did and is awaiting a response.

Court date is set.

Is it better to appear "Special Appearance" or "General Appearance" before the court?

Demand a Jury Trial?

Any answers to my questions would be appreciated.

Illinois - Cook County is where we live if that helps.

Thanks

TwoCents

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Not an easy question to answer...directly...

It does depend on the type of debt. If its a credit card you're talking about, then the chances are that the original terms and conditions under which the CC was issued says something about the OC selling the debt. John is now called a junk debt buyer (JDB) but is still just another collection agency (CA).

Your friend does need to show up at the court hearing (or else John will get a default judgement), but there may be other things you can do...

Since you're in IL, you might want to go look at www.edcombs.com ...they're a fairly reputable consumer law group that might have some insight into who you're dealing with...

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Yes, it is credit card debt. The so called evidence that was presented was small, small print of the marked paragraph entitled "Default and Termination of Agreement".. Here it states "If we sue you, or if we HIRE a third party to collect your Account balance, you will pay our court costs, reasonable attorneys' fees and other collection costs etc. etc... It doesn't state "who ever they might sell to".....

Thanks again for the referral I appreciate it and will search the site...

TwoCents

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Original creditors are permitted under law to sell or assign debt to another for value. If they sell the debt to another company the terms of sale usually include a full transfer of all rights and remedies under the original contract.

Given your description, yes, the buyer can pass on collection expenses to your friend.

Now this is where it gets a bit muddy. Willingtocope mentioned a junk-debt-buyer, but that depends. If the debt was sold to "John" before it went into default, then they are not a debt collector (CA, JDB) they are a servicer on the account and have all the legal rights of the original creditor. They are only a CA/JDB if they obtained the debt after she defaulted and would then be subject to the Fair Debt Collection Practices Act.

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