Debt Buyer Chain of Title & Standing Defenses

Major debt buyers—including Midland Credit Management (Encore Capital Group), Portfolio Recovery Associates (PRA Group), and LVNV Funding (Sherman Financial)—rarely originate debts. They purchase vast portfolios of defaulted debt for pennies on the dollar. Under civil procedure rules, a debt buyer has no legal right to sue unless they can prove an unbroken Chain of Title.

1. The Chain of Title Requirement

To establish legal standing as a real party in interest, a debt buyer must prove every transfer of ownership from the original credit card issuer (e.g. Citibank) to each intermediary buyer, and finally to the plaintiff:

• Specific Bill of Sale: A generic bill of sale referencing "all accounts described in Exhibit A" is inadmissible hearsay unless Exhibit A specifically lists your account number, balance, and debtor name.
• Redacted Schedules: Debt buyers routinely file heavily redacted portfolio spreadsheets. Courts across the nation have ruled that unauthenticated, redacted spreadsheets fail the business records exception to hearsay.

2. Attacking Robo-Signed Affidavits (FRE 803(6))

Debt buyers rely almost exclusively on sworn affidavits executed by their own employees (e.g. "Custodian of Records") claiming to have personal knowledge of the original bank's records:

• Lack of Personal Knowledge: The affiant was never an employee of Citibank, Chase, or Synchrony Bank. They have no personal knowledge of how the original account statements were created or maintained.
• Hearsay Objection: Under Federal Rule of Evidence 803(6) and state equivalents, a witness cannot authenticate business records of a third-party entity without establishing familiarity with the recordkeeping system of that third party.