Collection Agency Carries Burden Of Proving Their Claims
Got The Evidence?
Knowledge is power and nowhere is this truer then in debt collection. For example, if you know that the original creditor is the one pursuing the debt, chances are this debt will be aggressively pursued because the original creditor has the back-up documents to establish the claim. This is not true with collection agencies where one collector can be working on hundreds of separate debts in any given week.
Old Debts – Less Valuable To Collection Agency
If on the other hand, if the debt is sufficiently old, such as a debt that is past due by more then a year, and which still is being perused by a collection agency (usually debts are sold and resold between collection agencies) the debt, in most cases has already lost most of it’s collectability. The older the debt the more difficult it is to prove. This is especially true when it comes to mortgage debt collectors.
Mortgage Collection Creditors
Mortgage collection creditors are particularly vulnerable where the original deed of trust and promissory notes had been sold, resold, divided and then resold again. Remember the stock-derivative fraud perpetrated by banks and the resulting economic meltdown in the home mortgage market?
Without the creditor being able to produce the original deed of trust and promissory note, the original loan documents that legally created the legal obligation, the creditor will have serious trouble in producing the necessary documentary evidence to prove their case. In short, the collection creditor may not be able to establish the original debt and therefore will likely lose at trial.
If you are the one being foreclosed upon, you should never voluntarily produce your own copies of the original deed of trust until you know the creditor can produce theirs. You are under no obligation to help the collection agency prove their case. Force them to produce the evidence or dismiss the case against you. Ideally, a lawyer who is not personally vested in the outcome is probably the best positioned to assert these kinds of arguments.
If foreclosure procedures have not yet started and you are dealing with the mortgage collector, request the collector provide the necessary documentation to prove their case. In most cases they won’t be able to or simply wont go through the process of trying.
So Why Do Collection Agencies File So Many Lawsuits?
One reason is because the majority of debtors become fearful and panic. They put their head in the ground and hope it will all go away. The fail to file an Answer, and the creditor wins by default, obtains a judgment against you, which they can use against you later when you financially recover. Judgments in most states are good for ten years, but can be renewed in some states.
Attorney Fees Clause – Prevailing Party Awarded Attorney Fees
Sometimes the product or service you financed contains an “attorney fees clause” in the sales or finance agreement you signed. If the document contains such a clause, the law usually requires it operate both ways. The prevailing party is entitled to the attorney fees – not just the creditor.
This is especially true in boilerplate agreements called adhesion contracts, when the creditor has drafted the agreement and therefore enjoys an unfair leverage over the buyer– these types of agreements are therefore, as a matter of public policy, usually construed in favor of the debtor.