German YusufovMarch 24, 2025

Debt can feel overwhelming, especially when you’re being hounded by collection calls or facing a lawsuit. Many Arizona residents aren’t sure who they even owe money to anymore. Is it the company they originally borrowed from or has the debt changed hands? Understanding the difference between an original creditor and a junk debt buyer is crucial—especially when legal action is involved.

At Yusufov Law Firm, PLLC, we’ve seen firsthand how debt collection lawsuits can blindside people. If you’re being sued, knowing who is behind the lawsuit and what rights you have can make all the difference. In this article, we’ll break down the differences between original creditors and junk debt buyers, explain why it matters, and discuss how you can fight back.

What is an Original Creditor?

An original creditor is the company that initially extended your credit or provided a loan. This could be a bank, a credit card company, a medical provider, or even a retail store that offers financing. When you borrow money or make purchases on credit, you enter into an agreement with the original creditor to repay the debt.

How Original Creditors Handle Debt

Original creditors typically try to collect unpaid debts themselves, at least for a while. They might send reminder notices, make collection calls, or even offer payment plans to help you catch up. If the debt remains unpaid, they may escalate their efforts by hiring an outside collection agency to pursue payment on their behalf.

However, if too much time passes and they believe the debt is unlikely to be repaid, they may decide to write it off as a loss and sell it to a third party. This is where junk debt buyers come into play.

Identifying an Original Creditor in a Lawsuit

If you’re being sued, one of the first things you should check is who is listed as the plaintiff in the lawsuit. If the lawsuit is from the original creditor—such as Wells Fargo, Chase, Banner Health, or Northwest Medical Center—it means they are trying to collect directly. If the plaintiff is a company you don’t recognize, you may be dealing with a junk debt buyer.

What Are Junk Debt Buyers?

Junk debt buyers are companies that purchase old, often charged-off debt from original creditors at a fraction of the original balance. These companies don’t issue loans or extend credit themselves. Instead, they buy and sell debt in bulk, hoping to collect enough payments to turn a profit.

How Junk Debt Buyers Operate

Junk debt buyers purchase large portfolios of unpaid debt for pennies on the dollar. The problem? These accounts often come with incomplete or inaccurate records. Some debts may already be past the statute of limitations, while others may have been previously settled or disputed.

Unlike original creditors, junk debt buyers don’t always have access to the full account history. Instead, they rely on limited data, which can lead to errors in collection efforts. This is why it’s so important to challenge their claims in court.

Common Junk Debt Buyers in Arizona

If you’re being sued by a company like Midland Funding, Portfolio Recovery Associates, CACH LLC, Cavalry SPV, Asset Acceptance, or LVNV Funding, you’re dealing with a junk debt buyer. These companies file thousands of lawsuits each year, often hoping that consumers won’t respond—resulting in an easy default judgment against them.

Key Differences and Common Issues When Being Sued by a Junk Debt Buyer

Being sued by a junk debt buyer is different from facing an original creditor. These cases often come with missing paperwork, questionable ownership of the debt, and aggressive collection tactics. Knowing what to expect and how to defend yourself can help you fight back effectively.

Documentation and Proof of Debt

One of the biggest differences between original creditors and junk debt buyers is the availability of documentation. Original creditors usually have detailed records of the debt, including contracts, payment history, and account statements. Junk debt buyers, on the other hand, often purchase debts with little more than a name and an alleged balance.

When a junk debt buyer sues, they may struggle to provide the necessary proof that they own the debt or that the amount is accurate. This can be challenged in court, and an experienced attorney can use this lack of documentation to fight back on your behalf.

Legal Rights and Collection Practices

Original creditors must follow state and federal laws when collecting debt, but they tend to be more cautious due to their reputation. Junk debt buyers, however, are notorious for aggressive tactics and have been caught violating the Fair Debt Collection Practices Act (FDCPA). If you’re facing harassment, threats, or misleading statements, you may have grounds to take legal action against them.

Negotiation and Settlement

When negotiating a settlement, original creditors may offer structured repayment plans. Junk debt buyers, on the other hand, often buy debt for so little that they are willing to settle for much less than the original amount. This means you may be able to negotiate a significantly reduced settlement if handled correctly.

Statute of Limitations

Debt doesn’t last forever. In Arizona, creditors typically have six years to file a lawsuit for unpaid debt. Junk debt buyers often purchase accounts close to or even past this deadline, hoping consumers won’t know their rights. If the debt is too old, you may have a strong defense to get the case dismissed.

Default Judgments

One of the biggest risks of ignoring a lawsuit from a junk debt buyer is a default judgment. Many people either don’t realize they’re being sued or they assume they don’t have a defense. If you don’t respond, the court will likely rule in favor of the debt buyer, leading to wage garnishments, bank levies, or liens on your property.

Chain of Title

A junk debt buyer must prove they have the legal right to collect on the debt. However, since these debts change hands multiple times, the chain of title is often incomplete. If they can’t prove a clear transfer of ownership, their case may be thrown out.

Comparison of Original Creditors vs. Junk Debt Buyers

Factor Original Creditor Junk Debt Buyer
Debt Ownership Issued the original credit or loan Purchased debt from an original creditor
Documentation Usually has complete records Often lacks full account history
Collection Practices Uses internal collections or agencies Relies on aggressive lawsuits
Negotiation May offer structured repayment plans Often willing to settle for less
Statute of Limitations Has a longer time to pursue collection May buy debts close to expiration
Proof of Debt Can provide contracts and billing history Often struggles to provide the necessary documentation
Lawsuit Risks May sue directly but with proper records Frequently files lawsuits but may lack proof

Advantages When Being Sued by a Junk Debt Buyer

If you’re being sued by a junk debt buyer, you have several advantages:

  • They often lack proper documentation to prove the debt.
  • The debt may be past the statute of limitations.
  • Their collection tactics may violate consumer protection laws.
  • They must prove they legally own the debt through a clear chain of title.

An attorney can force them to provide this proof in court—something a junk debt buyer often fails to do.

Protect Your Financial Future: Contact Yusufov Law Firm Today

If you’re being sued for debt in Tucson, Mesa, or Phoenix, ignoring it won’t make it go away. Many people lose cases simply because they don’t respond in time. At Yusufov Law Firm, we help Arizona residents fight back against debt collection lawsuits, challenge junk debt buyers, and protect the financial future of Arizona residents.

Call us today at (520) 745-4429 in Tucson or (480) 788-0098 in Mesa/Phoenix for a free consultation. Don’t let debt collectors control your future—take action now.