Can Credit Card Debt Be Sold After a Lawsuit Loss?

It's entirely possible for a card issuer to sell the debt they claim you owe, even if they lose a lawsuit. This practice has been around for centuries, and it's based on well-established legal principles. But how does this work, and what can you do to protect your rights? Let's delve into the details.

Understanding the Scenario

When a creditor, such as a credit card company, sues you and loses, they can still attempt to sell the debt to another party. This is legal and has been a common practice since ancient times.

Many people, even those with legal knowledge, may be uncertain about this. After all, the concept of a creditor selling a debt can seem counterintuitive. However, it's crucial to understand that even if the original case is lost, the debt can still be sold. This is because the debt, in essence, is an asset that the creditor can manage and sell like any other property.

For example, if a creditor sues and loses, they might sell the debt to a collections agency or another financial institution. This is similar to how they might sell furniture, real estate, or any other assets they own. The key is that the creditor's right to collect the debt does not necessarily disappear if they lose in a lawsuit.

Debt Reporting and Legal Statements

The reporting of a debt to a credit reporting agency by a credit card company is not proof that you owe the debt. It's simply their claim. You have the right to dispute this claim and record your statement on your credit reports. Every credit bureau allows you to make a statement and have it appear on your credit reports.

This is a crucial step in protecting your credit history. Once you have submitted your statement, it should be included in your credit report, making it clear that you dispute the debt. This can lead to an investigation by the credit bureaus and the debt collector, potentially resulting in the removal of the debt from your credit report.

Seeking Legal Assistance

It's always wise to seek legal help in such situations. Laws continually evolve, and the steps you can take to protect yourself may change over time. If you own a home, consider visiting the county’s website and performing an official records search. You might uncover something you were previously unaware of.

In addition to legal advice, it's essential to be aware of the tactics used by debt collectors. They are known for being extremely persistent and may attempt to garnish your wages. For example, I had a case where a debt collector attempted to garnish my wages almost five years after a failed lawsuit. I was unable to work due to a disability, which made this particularly challenging.

Debt collectors are legally allowed to request a court order to garnish your wages, but if you can prove that you do not owe the debt, they may not succeed. Therefore, gathering evidence and understanding your legal rights are crucial.

If a court has determined that you do not owe the money, the debt essentially ceases to exist. In such cases, efforts to sell or collect the debt are not valid. It's important to challenge any claims of debt that are not substantiated by a court ruling or a signed agreement.

In conclusion, while a credit card company can sell the debt they claim you owe even if they lose a lawsuit, there are steps you can take to protect your rights and credit history. Understanding your legal rights and seeking professional advice can make a significant difference in your financial well-being.