Being served papers for a debt collection lawsuit is one of the most stressful moments many people ever experience. If you are in this situation or you are waiting for this dreaded moment to arrive due to unpaid debts, don’t despair. You can and should defend yourself against a debt collection lawsuit. A failure to show up in court could lead to a default judgment for the collector who would then be eligible to seek payment through other means like judgment liens, wage garnishment, etc.

Preparing to Defend Against a Debt Collection Lawsuit:

  1. Contact an Attorney: Working alongside an experienced consumer law attorney is the most efficient means of preserving your debt collection rights.
  2. Respond: When faced with a debt collection lawsuit, many borrowers make the same initial mistake They fail to respond to the notice. The notice usually arrives in the form of a “summons and complaint.” If you receive this notice and you owe the debt and can’t pay it, you still need to respond. If you fail to respond, the collector could get a default judgment against you that opens up additional avenues of collection including wage garnishment, taking funds from your bank account, etc. (Avenues of collection available through .judgment will vary depending on the state). The collector may also be able to add attorney’s fees, court costs, interest, etc. to the balance which in some cases will immediately double or triple the amount owed. In many cases, a simple two sentence response denying liability to the lawsuit filed in court could lead to a negotiated settlement that could save the borrower money.
  3. Issue a Challenge: In some situations, it can be beneficial to challenge the plaintiff’s right to bring the lawsuit by challenging their standing to sue in their name. For instance, credit card debt is often purchased for pennies on the dollar by outside collection groups who then turn to the courts to file lawsuits to collect on the debt. The collection company is required to prove that they have the right to seek payment on the debt by providing a transfer of the signed credit card agreement. Challenging the standing of the plaintiff in the case means asking the court to dismiss the case because the collection agency cannot provide the correct chain of custody or paper trail proving you owe them the debt.
  4. Request Proof of the Amount Owed: Demand that the collector/plaintiff in the suit provide the original signed agreement and a balance on the account from zero to the present balance. In many cases, the documentation provided by the collector is inadequate because debts often change hands multiple times. In some cases, the original creditor may even lack the accurate documentation of the debts customers owe. If they cannot produce precise documentation, it’s not surprising that collection agencies often aren’t able to come up with it either.
  5. Question the Statute of Limitations: Most states have a statute of limitations (typically from 4-6 years) applicable to filing suit to collect on a debt. Some collectors ignore the statute of limitations and sue anyway. Always check to see if the statute of limitations has expired.
  6. Filing a Countersuit: If the debt collector violated provisions of the Fair Debt Collections Practices Act, the consumer might be able to file a countersuit citing violations of the FDCPA.
  7. File for Bankruptcy: Filing for bankruptcy doesn’t always make sense, but in some situations, it can be the most efficient way to handle a collection debt lawsuit.

If you are facing a collection debt lawsuit and you aren’t sure where to start, get in touch with one of the experienced consumer protection attorneys at Aronow Law PC today. We have the experience you need on your side.