Common Defenses in Debt Buyer Lawsuits

Can a debt buyer sue you? Yes, but you might have one or more defenses.

Updated by , Attorney University of Denver Sturm College of Law
Updated 9/24/2025

If you're served with a collection lawsuit, the company suing you might not be your original creditor. In this scenario, a debt buyer is likely suing you. Debt buyers purchase debts from creditors for a fraction of their value and routinely file lawsuits to collect from consumers.

Fortunately, there are debt-buyer lawsuit defenses that might help you defend against the lawsuit.

What Is a Debt Buyer?

"Debt buyers" are companies that buy large numbers of debts from creditors for pennies on the dollar. The debt buyer purchases the debts cheaply, so it can make a profit even if it collects only a small amount on those debts.

Once a debt buyer buys your debt, the original creditor has no legal interest in the debt. Because the debt buyer now owns the debt, it has the right to sue you. Most debt buyers regularly sue consumers.

Defenses to Debt Buyer Collection Lawsuits

If a debt buyer sues you, you might have several defenses available. Here are some of the most common defenses to a debt buyer lawsuit.

Missing Paperwork

In many states, a debt buyer must have paperwork demonstrating the agreement between you and the original creditor to sue you or to add interest or attorneys' fees onto the balance. This paperwork is often in the form of a cardmember agreement for credit card debts. Cardmember agreements have information about which state law applies to the case and how much the debt buyer can collect in interest and attorneys' fees.

Often, a debt buyer doesn't have this paperwork and might never be able to get it from the original creditor. Many creditors don't cooperate when debt buyers ask for cardmember agreements, often because they have sold the debt "as is."

Some debt buyers will attach your regular billing statements to the lawsuit and try to pass them off as the cardmember agreement. This might or might not be a sufficient substitute for the actual agreement, depending on whether the records are sufficiently reliable.

No Standing to Sue

"Standing" means a person or business has a legal interest in a case. In collection suits, it means a debt buyer must prove that it legally owns your debt. Because the debt buyer didn't enter into a contract with you, it can only meet the standing requirement by demonstrating that the original creditor sold or assigned the debt to it. Many courts require that the debt buyer produce documents showing the assignment or purchase of the debt.

Inaccurate or Incomplete Records (Credit and Billing Histories)

Because many debt buyers purchase debts "as is" from original creditors, they don't know if the original creditor properly credited your payments. They also might not have your billing statements or documents demonstrating when you incurred the debt.

Statute of Limitations Has Expired

The statute of limitations is the amount of time a party has to bring a legal claim. After the deadline passes, the law bars the legal claim. The applicable period to collect on a debt varies by state.

Determining the statute of limitations in your case can be complex for several reasons.

  • It can be tricky to figure out which state law governs. Generally, your credit or cardmember agreement will set forth the state law that applies to your contract. In many states, if there is no cardmember agreement, the statute of limitations in the state where the debt buyer files the lawsuit will apply.
  • The limitation period can vary by the type of claim. Many states have different statutes of limitations for written contracts, promissory notes, and oral agreements. If the debt buyer has alleged multiple claims against you, each may have a different limitations period.
  • You can accidentally revive the statute of limitations. You can restart the statute of limitations period by saying certain things or taking certain actions, which vary by state. For example, making a payment or acknowledging the debt might revive the statute of limitations.

You might have a valid statute of limitations defense if it has been many years since your last payment. Often, a debt buyer won't know when you made your last payment or what statute of limitations period applies to your debt.

If you can get your cardmember agreement and determine which state law applies, you have a good start on determining whether this is a valid defense in your case.

Evidentiary Defenses

Because the debt buyer didn't make the contract with or extend credit to you, it often must rely on records or documents created by other parties, such as the original creditor, to prove its case. The debt buyer might have trouble getting the court to accept those documents as evidence. The debt buyer has the burden of proving it owns the debt and the debt amount, using admissible and reliable evidence.

If you think you might have an evidentiary defense or objection, contact an attorney who understands your state's evidence rules.

Fair Debt Collection Practices Act (FDCPA) Violations

If a debt buyer violates the federal FDCPA or state debt collection laws, you might have a counterclaim for damages or you might be able to use the violations as leverage in settlement negotiations. (In most cases, debt buyers must comply with the FDCPA.)

Other Defenses to Debt Buyer Collection Cases

If you have another reason for not owing the debt, you should raise that defense in the collection lawsuit. Often, debt buyers sue for:

  • debts that you discharged in bankruptcy (continuing to collect a discharged debt might violate federal law and could be grounds for sanctions against the debt buyer)
  • improper service of the lawsuit
  • credit card debts that another person, such as a family member or identity thief, incurred or
  • debts that are legally invalid for other reasons, such as debts you have already paid off.

In the above instances, you would most likely have a defense to the collection lawsuit.

Steps to Take If You're Sued

If you're sued, in almost all cases, you should file an answer to the lawsuit, raising any valid defenses or counterclaims available to you. It's a good idea to get help from an attorney. A lawyer can prepare the response and represent you in court. If you fail to respond to the suit, the plaintiff will probably get a default judgment against you.

Talk to an Attorney

Again, if you're facing a debt buyer lawsuit, consider hiring a lawyer to represent you. Having a lawyer can greatly improve your chances of a positive outcome. But keep this in mind: If hiring a lawyer costs more than the creditor seeks in the lawsuit, it might not make sense to seek attorney assistance. Still, you should respond to the suit so the debt buyer doesn't get a default judgment against you. To learn about representing yourself in court, get Represent Yourself in Court by Paul Bergman and Sara J. Berman (Nolo). Also, you might qualify for free or low-cost legal advice from a legal aid organization.

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