Sued by a Debt Buyer in New York? Here Is What They Have to Prove to Win

If the plaintiff in your debt lawsuit is a company you have never heard of — names like Midland Funding, LVNV Funding, Portfolio Recovery Associates, or Cavalry SPV — you are likely being sued by a debt buyer. Debt buyers purchase large portfolios of old, defaulted accounts from original creditors for cents on the dollar, then file mass lawsuits to collect. They are not the bank or store that originally extended you credit. And in New York, they face a higher burden of proof than an original creditor does.

What is a debt buyer and how are they different from the original creditor?

When a credit card company or lender decides a delinquent account is uncollectible, it often sells the account — along with thousands of others in a batch — to a debt buyer at a steep discount. The debt buyer then has the right to collect the full balance. The problem is that when accounts change hands multiple times, documentation gets lost. A debt buyer suing you in court must prove they own the right to collect — and that chain of proof is where their cases most often fail.

Proof requirement 1: Chain of title — they must prove they own your debt

The foundation of any debt buyer's case is proving they own the debt. This requires establishing a complete, unbroken chain of assignment from the original creditor to the current plaintiff. New York courts require a debt buyer to prove an unbroken chain of assignment with competent evidence. A bill of sale from the original creditor, transferring the specific account at issue to the debt buyer, is the core document.

The challenge: debts are often sold multiple times. If Citibank sold a debt to Company A, which sold it to Company B, which is now suing you, each link in that chain must be documented. A gap — a missing bill of sale, an assignment that does not specifically identify your account — is a defense you can raise.

Proof requirement 2: Documents attached to the complaint — CPLR 3016(j)

The 2022 Consumer Credit Fairness Act added CPLR 3016(j), which requires a plaintiff in a consumer credit action to attach specific documents to the complaint at the time of filing. For debt buyers, this includes:

• A copy of the original written contract or credit agreement — the terms of the account when it was opened. For a revolving account such as a credit card, where there is often no signed contract, the charge-off statement may be attached instead
• A copy of the charge-off account statement — showing the balance at the time the original creditor wrote the account off as a loss
• A recital in the complaint of the chain of ownership — each prior owner of the debt and the date it was transferred to the plaintiff

Before the CCFA, debt buyers could file bare-bones complaints with almost no documentation. CPLR 3016(j) changed that. If you receive a complaint and those documents are not attached, that is a non-compliance argument — and potentially a basis for dismissal or amendment.

Proof requirement 3: Competent affidavits for a default judgment — CPLR 3215(f)

When a defendant does not respond to a lawsuit and the plaintiff seeks a default judgment, the CCFA amended CPLR 3215(f) to require more than just an attorney's statement. In a consumer credit case, the plaintiff must now submit:

• An affidavit from a person with actual personal knowledge of the facts — someone at the debt buyer who actually reviewed the account records, not just a law firm attorney
• Documentary proof of the amount owed
• Evidence establishing the chain of assignment

Debt buyers frequently have difficulty meeting this standard because their records are incomplete. Courts in New York have denied default judgments to debt buyers who submitted only boilerplate attorney affidavits without actual documentary proof. Even if you miss your Answer deadline, a debt buyer may not be able to get a default judgment if they cannot meet CPLR 3215(f). But do not rely on this — always respond if you can.

Other defenses specific to debt buyer cases

• Statute of limitations. Debt buyers often sue on old debts. Under CPLR 214-i (3 years for debts accruing on or after April 7, 2022) or CPLR 213(2) (generally 6 years for older debts), the debt may be time-barred. This must be raised in your Answer.
• Incorrect amount. Debt buyers sometimes inflate the balance with interest or fees added after purchase that are not authorized by the original agreement. Challenge the amount if it does not match your records.
• FDCPA violations. Debt buyers are 'debt collectors' under the FDCPA. Threatening to sue on a time-barred debt, or filing a lawsuit the buyer knows is untimely, may violate the FDCPA. Statutory damages of up to $1,000 per lawsuit — plus any actual damages and attorney's fees — are available — whether you have a claim depends on the specific facts of your case.
• Identity or account errors. Batch purchases of debt are error-prone. Debt buyers sometimes sue the wrong person or confuse accounts. If the account is not yours, deny it explicitly in your Answer.

What to do when you are sued by a debt buyer

1. Read the complaint carefully. Who is the plaintiff? Is the amount correct? Are any documents — the original contract, charge-off statement, assignment records — attached?
2. Note the answer deadline. New York law generally allows 20 to 30 days from service to file an Answer, depending on how you were served. Check the summons.
3. File a written Answer. Deny what you dispute, raise your affirmative defenses (statute of limitations, chain of title, incorrect amount), and put your defenses on the record.
4. Send a written debt validation request. Under the FDCPA, a debt collector must provide written verification of the debt if you request it within 30 days of their first communication. This is separate from your court Answer — do both.
5. Request documents in discovery. Once you have filed an Answer, you can formally request the original credit agreement, account statements, and all assignment records. Many debt buyers will settle or drop the case rather than produce complete documentation.