We discussed two kinds of jurisdictional issues in a recent teleconference – two different issues that call for very different responses.
In this video we’ll discuss what happens when the debt collector doesn’t show its ownership of the debt and when you are not properly served with the lawsuit.
– Jurisdictional Issues in Debt Law
Ownership of the Debt
When debt buyers bring a lawsuit, their ownership of the debt is always in question. It won’t be their name on the debt instrument or contract, and they will have purchased the debt – gotten it on “assignment.”
There is nothing wrong with that, let me emphasize. Most debts are freely transferrable (unless either a contract or law says they can’t be transferred) – so in most cases this will not be an issue. But what is an issue is proof of ownership. Only the true owner of a debt is permitted to bring a lawsuit. In a way that’s a no-brainer, isn’t it? If I happen to hear that someone owes you money, I can’t sue them for it can I?
No – if I want to sue, I must prove that I am the “true party in interest.”
Without the true party in interest’s participation, the court does not really have jurisdiction over the subject matter of the case. If I bring suit on a debt someone else owes you, and that person gets around to pointing out that I don’t own the debt, the case should be dismissed immediately – without prejudice. If the person being sued does show that the plaintiff cannot prove ownership, the proper response by the court is to dismiss immediately without taking any other action – it can’t make a judgment about the validity of the debt without the real owner being present.
You can attack ownership of the debt at any time, and in a debt case you should always contest the issue not only because you might win, but also because debt collectors actually try to collect debts that don’t belong to them fairly often. You should always make them prove it.
In the case of the big junk debt buyers, they often will have a so-called “bill of sale” between the original creditor and the junk debt buyer. It will say that the creditor is selling and assigning umpteen million dollars worth of debts to the debt collector. It will mention an attachment with the numbers of the accounts sold.
And it will often not have that attachment or anything else linking your account to that sale. That is inadequate proof of ownership. It is no proof of ownership. If you attack the case on that basis it should be dismissed – unless the debt collector can supply the information. For some reason,they often cannot.
You can make this argument at any time.It isn’t waived by you participating in the case. Any time you can prove the debt ownership isn’t established, the case should go away.
Sewer service is different. In this situation, the process server threw the summons into the ditch while the defendant was watching and then swore to having given the summons to the defendant. In that situation, the defendant is forced into a choice: attack the court’s jurisdiction immediately by motion to quash, wait and attack jurisdiction, or defend. If you take actions to defend on the merits of the case – you say you don’t owe the money – you will likely be “waiving” or letting go your attack on the court’s jurisdiction.
If there is anything suspicious to you about the way you were served, or if the language of the petition filed against you is not clear or understandable, you need to look at your rules of civil procedure – under the “pleadings” section – before you file an answer. Otherwise you risk waiving your attack and “consenting” to whatever was wrong. Sometimes you can lose your best defenses if you do this.