‘Hearsay’ is, as we just know, what it means; what we hear another say or what is heard by someone from another third party. These terms are mostly used in litigation in court hearings by evidence and testimony from witnesses other than the actual declarant, which statements are cross-examined by attorneys and prosecutors. In such situations, ‘hearing evidence’ is used to denote an out-of-court statement made by a person or persons brought into the trial to prove the true truth of a litigation.
The Hearsay Evidence Rule dictates that not all litigation can be admitted as evidence in a lawsuit or trial unless a special exception applies. This is simply because hearsay applies to the facts or statements of persons actually present in court or under oath to check the authenticity of the statements.
As is well known, in cases of debt recovery or collection, there are several cases where recovery cases are handled or settled through court proceedings. However, this is an area where the Hearsay Evidence Rule applies in the sense that debt collection agencies sometimes use the resources they have available to recover amounts owed.
Sometimes it happens that debt collection agencies or ‘debt buyers’ do not have documents proving that the debtor owes money to the creditor, such as the original loan or contract document. In such cases, agencies take advantage of the debtor’s ignorance of collection laws to obtain standard judgments so that they can legally access personal information about the debtor, such as bank accounts, payroll statements and other personal information. If they succeed in doing so, a debtor’s assets can be frozen and inaccessible unless the amounts owed are returned.
However, in cases where such legal injunctions are not possible, creditors and debt collection agencies attempt to use statements from friends and employees to make statements under oath. The Hearsay rule of evidence means that no out-of-court witness can make oral or written statements to provide evidence on a quota recovery issue.
We may well ask why collection agencies and creditors take care of such activities. The truth is that debt collection agencies handle thousands of criminal accounts and have virtually no real idea of amounts owed unless the creditor provides them with the information. In the absence of original documents or statements, it is up to the collection agency to prove that the debtor owes the money to the creditor.
Every claim followed up by the debt collection agency is a significant factor in the debt buyer’s damages; for every dollar recovered, their commission is paid in penny. To increase their claims, they usually present old credit card statements or loan documents to indicate how much money the debtor owes.
The Hearsay Rules of Evidence apply here. Invoice statements are inadmissible in court because they are considered material provided by an out-of-court witness to prove the truth of an undeniable case. Therefore, monthly credit card or loan statements are inadmissible evidence as they are ‘nothing but hearsay’.
Of course, it is ethical to pay taxes on time; However, if there are financial constraints, it is better to research and work out an agreement to pay off a reduced debt under conditions that make repayment easier. However, many collection agencies are known to move and use scare practices to recover debt which is strictly illegal and not in accordance with the law on judicial collection practices.