Yes. The idea that you don’t owe a debt buyer simply because you “never signed a contract with them” is a common misconception, but it is not legally correct.
When you originally opened a credit card, took out a loan, or used a line of credit, you signed an agreement with the original creditor. That agreement created the debt. It also almost always included a clause allowing the creditor to sell, transfer, or assign the debt to another company. This process is legal and widely recognized under both federal and state contract law.
When a debt is sold, the new owner becomes the lawful holder of the account. This means the debt buyer steps into the shoes of the original creditor and has the same right to collect on the account that the original lender had. The consumer’s obligation doesn’t disappear just because the ownership of the debt changed hands.
Legally, you do not need to sign a new contract with the debt buyer. Your obligation comes from the original agreement you signed — and that obligation follows the account even after it is sold.
When Can You Challenge a Debt Buyer?
While you cannot avoid a debt simply because you didn’t sign a contract with the debt buyer, you can challenge the debt if:
- The debt buyer cannot prove they own the account
- The assignment paperwork is incomplete or inaccurate
- The balance is incorrect
- The debt is time-barred
- The collector violates the Fair Debt Collection Practices Act (FDCPA)
Many debt buyers cannot produce the proper documentation, and that can be a strong legal defense.
Bottom Line
Not signing a contract with the debt buyer does not erase the debt. What matters is whether the debt buyer can prove they legally own the account and that the amount claimed is accurate.
If you’re being contacted by a debt buyer and you’re not sure if the debt is legitimate, you should request validation and speak with a consumer-rights attorney. Many debt buyers cannot meet their legal burden, and you may have options to dispute the debt or pursue damages if your rights have been violated.