Jacksonville, FL -- (SBWIRE) -- 02/15/2011 -- Junk Debt is a multi-billion dollar industry involving charged-off debt (usually credit card or medical debt), which is often sold to large investors or similar enterprises for pennies on the dollar in the hope of turning a lucrative profit. The junk debt buyer is permitted to collect or sue for the entire value of the debt, not just what they paid for it.

As your Jacksonville bankruptcy lawyer explains, these "junk debt buyers" purchase large portfolios of delinquent or charged-off accounts from credit card companies or even other collection agencies. These companies (more than one-third are law firms) are referred to as "bad debt buyers", "zombie debt collectors", "debt buyers" or "bottom-feeders."

These bottom-feeders fall under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 definition of a "collection agency" and are subject to all penalties therein. If they are unsuccessful in collecting the debt after systematically harassing you with letters and telephone calls, they will often resort to filing a lawsuit against you.

It's unfortunate these bottom-feeders win 80 to 90 percent of the lawsuits they file because people do not bother to show up to Court or are simply not aware of their legal rights. According to your local Jacksonville bankruptcy lawyer, most of the debt these bottom feeders purchase is time barred and well beyond the statute of limitations for collections.

Once a judgment is entered against you, your wages and bank accounts are subject to garnishment and your vehicle and other personal items may even be seized and sold at auction to satisfy the judgment (debt).

These bottom-feeders may even file a 1099 against you for the full amount of the debt (even if it's time barred) claiming a "loss" that isn't real which will increase your tax liability by the amount of the debt.

Bottom-feeders also create subsidiary companies and "sell" or "assign" your debt from one subsidiary to another in the hopes that it will not be listed properly in your bankruptcy.

And nearly all bottom feeders deliberately list debt they've purchased incorrectly or multiple times under different subsidiaries on credit reports, which violates consumers' rights under the Fair Credit Reporting Act (FCRA).

If you have more questions about junk dept purchasers feel free to call your local Jacksonville bankruptcy lawyer, Attorney Robert Peters at 904-421-6907.

About Robert L Peters
Attorney Robert Peters specializes in personal bankruptcy & foreclosure defense in Jacksonville and Amelia Island/Fernandina Beach, Florida. Robert Peters helps his clients restart their lives through bankruptcy relief and foreclosure defense.

Website: http://www.restartyourlifejax.com
Blog: http://yourjacksonvillebankruptcyattorney.com