How do you defend a debt collection lawsuit?

Asked by: Prof. Olin Johnson MD  |  Last update: March 20, 2024
Score: 4.8/5 (35 votes)

Common Defenses
  1. You do not owe the money. ...
  2. You Dispute the amount of the debt - Plaintiff is suing for the wrong amount of money. ...
  3. Plaintiff has been unjustly enriched. ...
  4. Plaintiff is violating the duty of good faith and fair dealing. ...
  5. Plaintiff waited too long to bring this case (laches) ...
  6. Contract is unfair (unconscionable)

How do you win a debt collection lawsuit?

Here are five ways you can win your debt collection lawsuit:
  1. Respond to the lawsuit.
  2. Make the debt collector prove their case.
  3. Use the statute of limitations as a defense.
  4. File a Motion to Compel Arbitration.
  5. Negotiate a settlement offer.

What happens if a debt collector files a lawsuit?

You may lose the ability to dispute the debt, if you believe you don't owe it or that the amount is wrong, and depending on your situation and your state's laws, the creditor may be able to: Garnish your wages. Place a lien against your property. Move to freeze funds in your bank account.

How do you stop creditors from suing you?

If you are able to pay the amount owed or able to negotiate to pay a portion of what you owe and settle the case, you'll need to also ask the Plaintiff to officially dismiss the case against you. Paying the debt does not automatically dismiss the case.

What are affirmative defenses for debt collection?

An affirmative defense is a defense that brings up new facts or issues not in the Complaint that, if true, would be a legal reason why the plaintiff should not win, or should win less than they're asking for. It is not a denial that you did what the plaintiff says you did.

How To Defend A Debt Collection Lawsuit | Step-By-Step Guide

15 related questions found

What are three things debt collectors are prohibited from doing?

A debt collector is also not allowed to harass, oppress, or abuse you or anyone else they contact. This includes repetitious phone calls with the intent to harass, use of obscene or profane language, and threats of violence or harm.

What is collection defense?

An attorney can step between you and the creditor and help you develop a plan. If you've been the victim of harassment or intimidation in the course of collecting a debt, an attorney can help you recover damages under federal and state law.

Can I settle a debt before court?

Sometimes you can negotiate with the debt collector to resolve or settle your debt before they sue you in court. Settling a debt before a lawsuit is usually the least expensive way to resolve a debt - for you and the debt collector - since they don't have to spend money on court costs or efforts to collect the debt.

What happens if a credit card company sues you and you can t pay?

Simply put, if you don't respond to the lawsuit, you'll usually lose by default. The court will issue an order called a default judgment. Losing a debt lawsuit opens you up to serious collection measures like wage garnishment, a bank account levy, or a lien on any property you own.

How likely is it that a collection agency will sue?

How likely is it that you will be sued for a debt? According to one Consumer Financial Protection Bureau report, 1 in 7 — or about 15% — of consumers contacted about a debt in collections were sued. But the likelihood of a debt collection lawsuit depends on several factors.

What's the worst a debt collector can do?

Here is a list of examples of how debt collectors can violate FDCPA rules: Use of threat, violence or other criminal means to harm a person, reputation or property. Use of obscene or profane language. False representation that the debt collector represents a state or federal government.

How do I respond to a court summons for debt?

You must fill out an Answer, serve the other side's attorney, and file your Answer form with the court within 30 days. If you don't, the creditor can ask for a default. If there's a default, the court won't let you file an Answer and can decide the case without you.

What is the 11 word phrase to stop debt collectors?

If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.

How do you outsmart a debt collector?

6 Ways to Deal With Debt Collectors
  1. Check Your Credit Report. ...
  2. Make Sure the Debt Is Valid. ...
  3. Know the Statute of Limitations. ...
  4. Consider Negotiating. ...
  5. Try to Make the Payments You Owe. ...
  6. Send a Cease and Desist Letter.

How do I get rid of debt collectors without paying?

If you notify the debt collector in writing that you dispute the debt within 30 days of receiving a validation notice, the debt collector must stop trying to collect the debt until they've provided you with verification in response to your dispute.

Should I ignore debt lawsuit?

If you get a summons notifying you that a debt collector is suing you, do not ignore it—if you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector's favor because you didn't respond to defend yourself).

Can you dispute a debt if it was sold to a collection agency?

Once you receive the validation information or notice from the debt collector during or after your initial communication with them, you have 30 days to dispute all or part of the debt, if you don't believe that you owe it. If you receive a validation notice, the end date of the 30-day period will be specified.

How long before a credit card company sues for non payment?

You're unlikely to be sued until your payment is six months late or more. If you're behind on your credit card payments and worried about the possibility of getting sued, read on to learn more about the process, how to fight back – or, better yet, how to avoid it in the first place.

How much credit card debt will they sue for?

Lawsuits aren't very common, but they do happen regularly. According to a Consumer Financial Protection Bureau (CFPB) report, credit card companies sue for non-payment in about one of every seven cases or nearly 15% of the time. The average litigated account balances ranged from $2,700 to $12,300.

Can you negotiate a debt after a Judgement?

You may be able to negotiate a settlement with the debt collector to allow you to pay off the judgment under better terms. In Limited Civil cases (cases for $35,000 or less), if the other side will not agree to a payment plan, you can ask the judge to order a payment plan. This requires filing a motion.

What percentage should I offer to settle debt?

“Offering 25%-50% of the total debt as a lump sum payment may be acceptable. The actual percentage may vary depending on the circumstances of the borrower as well as the prevailing practices of that particular collection agency.” One benefit of negotiating settlement terms is likely to reduce stress.

How to negotiate a debt settlement without a lawyer?

Steps to negotiate your debt
  1. Work with a credit counselor.
  2. Enroll in a debt management program.
  3. Try various debt payment strategies like the snowball method.
  4. Ask the creditor for a payment deferment.
  5. Ask for a lower interest rate.
  6. Consider a debt consolidation loan.

How many years does a collection agency have to collect?

Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.

Why do collection agencies sue?

In some states, if you pay any amount on a time-barred debt, or even promise to pay, the debt is “revived.” That means the clock resets, and a new statute of limitations begins. The collector might be able to sue you to collect the full amount of the debt, which may include extra interest and fees. Pay off the debt.

Does a collection agency own your debt?

Because they took the risk of purchasing the debt from the original creditor (and paying in advance to the original creditor), this debt becomes their own, and any amounts collected are theirs. Debt collectors get paid when they recover the delinquent debt.