The law requires proper documentation of a debt.

According to the Consumers Union, the nonprofit publisher of Consumer Reports magazine, debt collectors are increasingly taking consumers to court without proof that they own the debt in question, or even that the debt is valid.  Consumers Union points to automated software used to file lawsuits by the thousands and the proliferation of “robo-signers” who falsely claim to review and verify debtors’ records before taking legal action. According to cardratings.com. industry insiders expect robo-signers [of affidavits of debt] to take center stage in the credit card industry.

A recent article in the Wall Street Journal led with “She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation’s largest debt collectors{and junk debt buyer}, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers.” The Wall Street Journal reported in another article “Some regulators and judges have complained that documents submitted to courts by debt collectors as proof of what a borrower owes frequently are sloppy or fraudulent. The accounts bought by debt-collection firms often lack information about the underlying debts, such as contracts or payment histories, according to judges who rule on collection cases.”

The Morning Call, an Allentown, Penn. newspaper, recently reported a Pennsylvania appeals court threw out a debt collector’s case against a woman who allegedly owed more than $5,000 on a credit card account because the collector couldn’t vouch for the accuracy of the electronic records it presented as evidence. “The court says if everything is computerized these days, we should have some testimony as to how these records are created and stored and whether they’re protected from hackers and viruses,” said Lawrence Rubin, the defendant’s lawyer.  http://www.mcall.com/news/local/allentown/mc-credit-card-debt-collection-pennsy20110221,0,6556927.story

There is hope for consumers who cannot pay their credit card debt.  They are not doomed to court judgments, bank account seizures, wage garnishments or perhaps bankruptcy.  If they answer a credit card debt lawsuit and demand proper documentation, they can prevail despite owing the money.

Learn how to protect yourself against debt collectors. Get started with my free Seven Dangers of Not Knowing How to Deal with a Debt Collector.