Consumers Should Understand Debt Buying

​Q:  What is debt buying?
A:  Debt buying occurs when a company purchases debts from a creditor, such as a credit card company, for a fraction of the face value of the debt. It is common for certain creditors, particularly credit card issuers, to sell defaulted accounts on which they have been unable to collect.

Q:  What happens when a debt buyer buys my debt?
A:  If a debt buyer purchases your debt from a company (e.g., your credit card company), you must still pay off the debt even though it’s no longer owed to the original creditor.

When a debt buyer buys debt from your creditor, the creditor removes that debt from its books. However, you now owe money to the debt buyer, and the debt buyer can bring an action against you to get that money. It may also use another collection agency to collect the debt or resell your debt to another debt buyer.

Q:  How would I know if a company purchased my debt from my original creditor?
A:  You may not know until the debt buyer takes some form of action against you. You may receive calls or letters from a debt buyer saying that you owe them money instead of your original creditor. Or you may not learn about the debt buying until you receive legal documents regarding the action against you.

When a debt buyer takes legal action against you, you will receive a legal document called a complaint. The complaint will list a series of numbered paragraphs. One of those paragraphs will most likely state that the debt buyer (the plaintiff in the action) purchased your debt, and can now recover the money it claims you owed to your original creditor. It may say something like this: “Plaintiff acquired, for a valuable consideration, all right, title and interest in the unpaid credit card debt. As a result, plaintiff became, and is now entitled to, the amount paid out by use of the Defendant’s credit and/or loaned at Defendant’s request, on the credit card.”

Q: Are there any differences between a debt buyer suing me and my original creditor suing me?
A: Yes. Your original creditor typically will have better access to your account information than a debt buyer. That means that the original creditor could be better able to produce evidence to support its case against you. For example, original creditors normally can prove that they own your debt, and are more likely to produce your credit card agreement and account statements.

Debt buyers, on the other hand, file lawsuits by the thousands. They rely on the fact that many people they sue will not respond or dispute the case. They often do not have adequate proof that they own your debt, and cannot obtain such proof from your original creditor to satisfy a court. Forcing debt buyers to produce your specific account information or prove that they own your debt may cause them to drop their lawsuit more readily than your original creditor might.

While there is a chance that you may not win a lawsuit against a debt buyer, you should still act in a timely manner to respond.

Q:  What should I do if I’m sued by a debt buyer?
A:  You should act as you would in any lawsuit. First, read the documents carefully. Because debt buyers are suing many people at once, the documents you receive may be incorrect or incomplete. Any errors or inconsistencies you find may be grounds for dismissal of the suit. Whether or not you find errors, you should read the information in the documents carefully and respond to the lawsuit as explained in the summons from the clerk of court. If you do not respond to the lawsuit, the debt buyer can get a default judgment against you. This allows the debt buyer to win in court without giving you a chance to defend yourself.

Q: Should I seek assistance from an attorney?
A: Yes. Most of the time, debt buyers do not expect consumers to fight back. However, answering the lawsuit by raising defenses or counterclaims may help erase or significantly reduce your debt. An attorney can help you decide whether you have a legitimate case against the debt buyer and can take steps to help improve the outcome of the action. He or she can also help you navigate the court system, and will advocate for you at every step of the case.

If you feel you cannot afford an attorney, you may qualify for legal assistance from your local legal aid office. Visit​ or call (866) LAW-OHIO to determine which legal aid office serves your area.


This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Linda Cook, senior staff attorney for the Ohio Poverty Law Center in Columbus. ​​​

Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.



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