We were retained by a client that discovered a 2007 default judgment from Capital One Bank, a common predatory lender who were represented by Forster and Garbus, a debt collection law firm after receiving notice that his wages were going to be garnished. Capital One is an original creditor which makes it more difficult to defend against most of the time. We cannot use standing and privity defenses against Capital One most of the time unless they buy the debt from another bank. Simply put, debt buyers like Portfolio Recovery Associates or LVNV Funding buy debt for pennies on the dollar from original creditors like Capital One and Citibank. However, because they buy the debt in bulk, they often do not acquire the debt in the proper fashion. The assignment paperwork which consists of the chain-of-title is often forgotten or improper. An actual employee of the debt buyer is often not available to testify to the fact that the debt was actually sold and acquired property. These are valid defenses in having these types of debts dismissed.
Unlike debt buyers, original creditors do not have to prove that they properly bought or sold the debt because they gave the loan to begin with. The client in this case informed us that he never received any court documents and was never served which is common due to sewer-service in New York. After we researched the address used to allegedly serve him with the court documents, we uncovered that the address used was one that he had been evicted from years prior to the commencement of the Capital One action. We were able to provide proof of the eviction, and Forster and Garbus agreed to vacate the judgment and settle the matter so as to avoid any potential action against them.