By: Robert J. Nahoum
In a debt collection lawsuit, the Plaintiff (the party bringing the lawsuit) always has the burden to prove that the Defendant (the party being sued) is responsible for the debt.Â To meet this burden, a junk debt buyer like Midland Funding must prove that (1) it has the right to sue; (2) the debt is attributable to the defendant; and (3) that the amount sued for is correct.Â It is never the burden of the Defendant to prove that he or she does not owe the debt.
To prove that a debt buyer owns the debt (called â€œstandingâ€), it must show how it came to acquire ownership of the debt.Â The sale of a debt from a creditor to a debt buyer or from one debt buyer to another is memorialized through an â€œassignmentâ€ in which the original creditor â€œassignsâ€ ownership (and the right to collect the debt) to a new creditor (called an â€œassigneeâ€).
Often, debts are sold and resold over and over again to a number of subsequent debt buyers.Â When this happens, the debt buyer must prove each and every assignment by showing a â€œchain of titleâ€ reaching all the way back in history to the original creditor.
Midland sued the consumer for only $1,257.98 in the Supreme Court, Wayne County New York (which has court and service fees of roughly $400 â€“ 31% of the amount sued for).Â The defendant made a motion to the Court for summary judgment arguing that Midland lacked standing to pursue the case.Â The defendant claimed that Midland failed to submit â€œevidence in admissible form establishing that (the original creditor) has assigned its interest in defendant’s debt to plaintiffâ€.
After examining the submissions of both parties, Judge Dennie M. Kehoe agreed with the defendant reasoning that â€œonce a defendant asserts the issue of standing, a plaintiff must come forward with admissible evidence, demonstrating that it is legally authorized to commence an actionâ€ and that â€œthe plaintiff has failed to demonstrate by documentary evidence in admissible form that it has standing to sue on the underlying claimâ€
The Court granted the defendantâ€™s motion and dismissed Midlandâ€™s case.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.Â With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C