Interrupter CheckmarkInterrupter IconFacebookGoogle PlusInstagramGroupRamsey SolutionsTwitterYouTubeExpand MenuStoreCloseSearchExpand MenuBackStoreSign in

Ask Dave

A Bad Debt Buyer

Peter received a collections notice, and he asked them to prove he owes the debt. It's a debt from 20 years ago, and Peter paid it off 10 years ago. What's the best way to get rid of this mess?

QUESTION: Peter in Nashville received a collections notice, and he asked them to prove he owes the debt. It’s a debt from 20 years ago, and Peter paid it off 10 years ago. What’s the best way to get rid of this mess?

ANSWER: Who would have that paperwork? You paid the bill off. It’s gone. That’s not something you would keep—normally. I guess you’d have to dig up old checks and have to go back to your bank of that time and pay the research fees and the fees it takes for them to pull the old checks out of microfiche to fight this and prove that you don’t owe it.

It’s a strange world where we’re guilty until proven innocent. That’s kind of where you are. Here’s the problem. What likely has happened is the debt has been sold or a computer glitch has happened, and the debt or the company has been sold off to another company. This is probably a debt buyer. What’s happened with the debt buyer market is there are some quasi-legitimate debt buyers that buy debt, but then there are people who are the bottom feeders of that world and buying this super-old stuff that is not collectable. It’s past the statute of limitations, for one thing. The second thing is there’s actually not anything owed, and they know it. They’re just such scum that they take a customer list and go see who they can intimidate into giving them some money.

I’m going to tell them that if they pursue this or if they put it on my credit, I am going to sue them for $10 million. Unless they can send you detailed proof of an account with an audit of the account 10 years ago, a) they’re over the statute of limitations, and b) you paid this company everything that they were owed and you don’t owe them anything, and unless they can prove otherwise to you, if they do anything else, you’re going to consider it slander and sue their butts off.

An original note is fine. There are original notes out there on me from 30 years ago, back when I borrowed money. Does that mean I owe the money? No. An original note is not proof of a debt. It’s proof that at one time, there used to be debt.

Unless they create an account with an audit of the original bill and they show the account being reduced and it wasn’t reduced to zero and they’ve got something to fight with, then you’re going to countersue them when they sue you or if they put it on your credit bureau report. Sue the collector who’s calling you personally. If they’re not calling you yet, make sure you’ve got a call block on it before you pick up the phone because you don’t want them hitting the return button on the thing and just wearing you out later.

These types of buyers will buy debt that went through bankruptcy. The file shows that the debt went through bankruptcy. Translation: There is no debt. It was bankrupted. The balance on the account is zero because of bankruptcy court. It’s called federal law. They will try to collect on that anyway knowing that there’s nothing due, which is straight-up illegal. It’s against federal law to do that, but they do it anyway. There’s tons and tons and tons of this going on out there. They’re buying this stuff for literally about a nickel or $.02 on the dollar. Then they just intimidate people with the same name into paying it who didn’t owe it in the first place. It’s that bad.

If this comes to my house and this is me, what I’m going to do is what I just described to you. I’m going to get all up in their stuff and tell them if they can’t prove the debt to you and they take one step forward into a lawsuit, you’re going after them. You’re going after their attorney. You’re going after them personally. You’re going after their company. I’m going to unleash hell in their life. They don’t want you making them a hobby, and you’re about to. Just start talking to them that way because you’re dealing with the bottom of the barrel here. They’ve got a 10-year-old debt and zero chance of that being inside the statute of limitations.