Debt lawsuits are, sadly, becoming more and more a part of the American consumers’s daily struggles. Fortunately, there are strategic ways to defend against a debt lawsuit if you have the wherewithal or proper legal debt specialists to help navigate through the murky waters of such lawsuits.
There are nearly 7000 debt collection agencies in the United States with well over 71 million people experiencing debt that are in collections. Often debt collectors will stop at nothing to scare or subtly threaten the consumer into paying their debt with the threat of an impending lawsuit. You know the drill: the endless calls and flood of mails that intend to spark fear in the ming of the debtor.
It’s in those times that you must know your rights. “Understanding the steps one can take after being served debt papers to defend against a potential lawsuit can be the key to fighting back,” explains Chantel Grant, Senior Partner at the GM Law Firm in Boca Raton, Florida. “There are right and wrong ways to respond with the idea of not responding altogether by far the worst line of defense a debtor can take.
Here are six things to know about preparing your debt defense.
1 – Don’t Ignore the Lawsuit
Obviously if debt is owed and you can’t afford to pay it, you still must take action. Not responding to the lawsuit will only make matters worse in the long run. No response puts the collection service in the driver’s seat. Wage garnishment and even taking funds directly from a personal bank account in some states are two terrible actions that can be made against you.
Once the debt goes to court, you must respond to the court by submitting legal briefs known as an “Answer”. A letter sent to the court will not do.
In the letter, debt specialists will advise to never admit liability and send the Answer by certified mail to the court’s bailiff to assure it was received.
In addition, don’t lag in getting your Answer to the court. Every state has its own set of rigid timelines for a proper response. Missing the deadline is akin to ignoring the matter entirely. Once that happens, you may forgo your right to dispute the debt and fight back down the road.
2 – Get Proof That The Company Has The Right To Sue
Oftentime your debt is sold from one company to another. In some cases, this can happen more than once. So whoever currently has what might have become a debt hot potato must show you proof that they are in the right to collect.
To prove the burden of debt, the plaintiff must first produce a credit agreement signed by the consumer. Then, you have a right to see the chain of events leading up to the lawsuit with all the paperwork showing a clear and distinct path back to the original creditor.
3 – Use the Burden Of Proof To Your Advantage
The burden of proof is squarely on the shoulders of the plaintiff. He or she must prove the following items:
- You are indeed on the hook for the debt
- They are the acting entity that has the right to sue
- The exact amount they alleg you owe
That last point is often the most difficult one for them to prove. If the debt lawsuit is a credit card lawsuit, then they must account for every penny and each activity drawn from that account. And they must prove it going back to the time the account opened to the present day.
That can be a lot of time and paperwork and debt cases have been thrown out with lack of precise documentation. Here’s where a legal team can provide superior service and be worth every penny you might pay them (which can often be far less than the debt you get resolved).
Some activity details of an account that can be argued:
- Defining the ever-shifting balance based on purchases and withdrawals.
- If a balance fluctuates because of increased fees not agreed by you when you first signed up for the credit line.
With the fluidity of accounts and balance, accurate documentation can often be tough for the plaintiffs to round up. Especially if the defendant’s legal team puts a tight window of time for production of these documents into play.
By applying the pressure, a debt collection lawsuit can be dismissed or, at the very least, eliminated for a pittance of what was actually owed.
4 – Enforce Your Statute of Limitations Rights
Every state has a different view of what they call the statute of limitations. This statute enforces the amount of time a creditor has between notifying you of a debt collection procedure and when a lawsuit can be filed.
It’s usually a handful of years (from four to six generally) and can also spring from the last day the consumer showed activity on the flagged account. That activity could be the use of the offending credit card or the time a payment was made.
Since the definition of that “activity” and each state’s statute of limitation time frame can change, you may want to seek a superior legal service to understand all options.
5 – Hire A Consumer Protection Legal Team
It may seem counterintuitive when you already owe money on a debt to incur even more with an attorney. However, the long-term savings and lessening of a permanently dark ding on your credit score may prove invaluable in the long run.
In addition, a lawyer group like the GM Law Firm offers free consultations to help you organize your thoughts, devise a plan and show you a path to debt resolution and financial freedom. Hiring an expert debt legal team can also help you avoid the harassment of third-party debt collectors.
Some debt specialist lawyers may even take a case pro bono if they truly believe the collectors have broken the law or clearly made harassing threats. Violations of the consumer protection federal laws could mean the plaintiffs not only eliminate your debt but also assume all legal fees.
6 – Counter Suing A Creditor Who Violated Federal Laws
The Fair Debt Collection Practices Act is one of several federal laws enacted to protect a debtor from harassing debt collectors. There are many fair and legal ways to collect on a debt, but many unscrupulous or aggressive third-party collectors often bend these rules. After all, they don’t get paid until you pay.
If proven, violations of these laws can mean instant debt resolution for the debtor and perhaps punitive monetary damages for stress as well as legal fees. These instances are often long shots, but worth noting and asking your legal counsel if you stand a chance at such rewards.
The key is knowing your rights to fight a debt lawsuit on a level playing field. If you have the unfortunate situation of finding yourself in debt, brush up on ways to get out as quickly as possible.
Facing a debt lawsuit is not something that will serve you well in the future.