Legal Question in Credit and Debt Law in California

The fact that you did not sign a contract with the collections agency has nothing to do with anything. If you owed Chase, and the collections agency bought the debt from Chase and received an assignment of Chase's rights to the money that you owe, then you now owe the debt collector.

A debt is an asset that can be sold and assigned. That means whenever you agree to pay someone money, they can always transfer that right to collect the money to someone else. You probably don't realize it but when you get check from someone and you sign the back and deposit it, you are doing the same thing. A check is really just an IOU combined with an order to the bank to exchange cash for the IOU. When you sign the back of the check and deposit it to YOUR bank, that is an assignment of the right to collect that cash from the check-writer's bank. Your bank then presents that check to the check writer's bank, and that bank pays your bank the money. This is all done electronically now, of course, but the basic legal rights and principals are the same.

If only it were so easy! From an (arguably) equitable standpoint, receipt of services and consideration obtained through borrowing effects an obligation. What seems to invariably trigger bankruptcy is just the usurious, implacable and unyielding nature in which the lender enforces that obligation.

This answer (by San Diego bankruptcy attorney, Asaph Abrams) doesn�t address all facts & implications of the question; it�s general info, not legal advice to be relied upon and exceptions may apply. It creates no attorney-client relationship; it may be pertinent only to CA and/or its Southern District Bankruptcy Court in San Diego. It�s independent of other answers. It may be time sensitive, as in past the �Use by� date: laws and case law change. Hire a bankruptcy lawyer before acting or refraining from bankruptcy or other legal action.