What constitutes legal proof that a debt has been purchased?

[dizzyliz]

I have been reading about how the CA's need to provide proof that the account they purchased is theirs, but I have not found any info on what that proof is supposed to be. I recently sent a Debt Validation letter to a CA and also disputed it on my credit report. I recieved a letter in the mail the other day from the CA that states the original creditor, account #, credit report account #, file #, Date that they purchased the account, SS#, and Balance due. The letter also states that they have responded and validated with Experian and if any info is not correct, to let them know.

What I would like to know is, what constitues legal proof that the CA now owns the debt, and are legally allowed to collect on it? Do they need to send proof that they purchased the debt? Or is this letter from them stating that they own it enough validation? Thanks in advance for your response.

[jennieb]

Did they send any statements or anything that has your signature on it?

[debtorshusband]

What I would like to know is, what constitues legal proof that the CA now owns the debt, and are legally allowed to collect on it? Do they need to send proof that they purchased the debt? Or is this letter from them stating that they own it enough validation? Thanks in advance for your response.

If by legal proof you mean what will hold up in front of a judge in court, what you want is a copy of the "Bill of Sale" or "Bill of Assignment". This will be a document that states who is selling the account, who is buying it, and of course, the fact that the account is being sold. It will be signed by representatives of both the seller and the buyer. If the account has passed through many hands, the entire chain of sales must be provided. Sometimes they will provide a "blanket assignment" which says the accounts being sold are listed in Appendix A. I have seen cases where judges rejected such documents, saying that proof that the account in question was part of the batch must be provided.

Regards,

DH

[nascar]

Since you're in California, this will apply to you.

9406. (a) Subject to subdivisions ( to (i), inclusive, an account

debtor on an account, chattel paper, or a payment intangible may

discharge its obligation by paying the assignor until, but not after,

the account debtor receives a notification, authenticated by the

assignor or the assignee, that the amount due or to become due has

been assigned and that payment is to be made to the assignee. After

receipt of the notification, the account debtor may discharge its

obligation by paying the assignee and may not discharge the

obligation by paying the assignor.

[dizzyliz]

Did they send any statements or anything that has your signature on it?

I have not received any copies of anything, or any statements with my signature. Only a letter from them stating that they own the account and I owe them the money (plus all the info mentioned above). Don't they have to provide some kind of proof that they own it? And if so, what would that proof be?

[dizzyliz]

Since you're in California, this will apply to you.

Okay, Huh? Sorry, but I really tried to decifer this so that I could understand it, but I have no clue what this is saying. Could you put it in simpler terms for me? I guess that's why they call me dizzyliz. Thanks.

[dizzyliz]

If by legal proof you mean what will hold up in front of a judge in court, what you want is a copy of the "Bill of Sale" or "Bill of Assignment". This will be a document that states who is selling the account, who is buying it, and of course, the fact that the account is being sold. It will be signed by representatives of both the seller and the buyer. If the account has passed through many hands, the entire chain of sales must be provided. Sometimes they will provide a "blanket assignment" which says the accounts being sold are listed in Appendix A. I have seen cases where judges rejected such documents, saying that proof that the account in question was part of the batch must be provided.

Regards,

DH

Do I have the right to ask for this information from them, and if so, do they have to provide it to me?

[debtorshusband]

Do I have the right to ask for this information from them, and if so, do they have to provide it to me?

You have the right to ask. There's certainly no law against it.

They may decline to provide it, without any legal repercussions, then you may tell them to jump in the lake.

Until they decide to file a lawsuit. Then you ask again as a Discovery request, and they must provide it if they wish to win their case.

Good luck.

DH

[nascar]

9406. (a) Subject to subdivisions ( to (i), inclusive, an account

debtor on an account ...

I have no clue what this is saying.

When a debt is sold, or assigned, the new owner, or assignee, has an obligation to make you aware of certain things before he is entitled to payment.

Foremost is a notice that the account has in fact been sold. A letter or notice from only the new owner is not sufficient. The notice needs to include some type of indication from the original creditor, or assignor, that all future payments are to be made to the assignee.

That notice has to come in the form of some kind of writing signed by the original creditor and indicating, with what I would call reasonable certainty, the specific account and the rights that were transferred. Again, the debt collector alone cannot provide this and still comply with the requirements.

Now, we all know that this rarely ever happens. For whatever reason debt repurchasers ignore this important step. I think, more often than not, it's because it isn't economical to spend the time and effort perfecting every assignment incorporated in a debt portfolio. They would rather simply tell you that you are now supposed to pay them and tough s**t if you don't like it. Additionally, the original creditor wants to dump the debt without incurring the additional cost of authenticating every assignment. They have already taken a beating on the account and have no desire to invest more resources into it.

The fact that they neglect to perfect the assignment is really a good thing for us because it sets up perfectly for a defense to any lawsuit that comes around. For if the assignment has not been perfected, the debtor still has the legal right to pay the original creditor if he chooses to do so. It follows then, that the debtor also has the legal right not to pay the debt collector if he chooses not to.

[dizzyliz]

Thank you for your response. This information is really helpful. I have one more question though. The letter from the CA states that "When we reported this account, Experian told us that we must use April 13, 2007 (the date we purchased this account) as the opening date."

Can the CA use this date as the reporting date on my credit report? I thought they had to use the date the account originally became delinquent. Or is that just for the Statute of Limitations? Thanks again for everyone's help.

[Betty109]

I know this is an old question, but I thought I'd add this tidbit in case it may help someone else--if they didn't notify you of the Assignment, it's a violation of the Uniform Commercial Code.

I have this in my Affirmative Defense (an Arbitration Award Confirmation suit).

22. Notice of Assignment of the alleged debt was never sent to the Defendant in violation of the Uniform Commercial Code

The Defendant never received notice of the assignment of the alleged Debt in violation of UCC 9 -406(a). U.S. Uniform Commercial Code.

[nascar]

I know this is an old question, but I thought I'd add this tidbit in case it may help someone else--if they didn't notify you of the Assignment, it's a violation of the Uniform Commercial Code.

I have this in my Affirmative Defense (an Arbitration Award Confirmation suit).

22. Notice of Assignment of the alleged debt was never sent to the Defendant in violation of the Uniform Commercial Code

The Defendant never received notice of the assignment of the alleged Debt in violation of UCC 9 -406(a). U.S. Uniform Commercial Code.

Thanks for adding that. As long as you haven't received a Notice of Assignment, you still have the option of paying the original creditor if you choose. That also means that you have the option NOT to pay the alleged assignee if you choose not to. It's one of those conditions precedent to the assignee's bringing of the suit we talk about. Cite to your own state's respective statute.