Debt feels like financial death. In February 2021, the consumer debts of Americans totaled over 4.2 trillion dollars. That exceeds the GDP of Germany, which has the fourth-largest GDP of any country in the world.
Debt buyers and collectors are persistent. They will file lawsuits against you at the drop of a hat. When many people receive a summons for a court appearance, they often go and admit all of their debts.
But you don’t have to fall victim to their games. You can mount a legal defense from the moment you receive a summons.
You just need to know how to do so. Here is your quick guide on launching a debt collection defense.
Keep a Lawsuit From Occurring
The easiest lawsuit to deal with is a lawsuit that never happens. Make your payments on time and in full with all of your debt collectors.
To keep yourself on time, adopt a debt payment plan. Write a list of all your debts, including mortgages and money owed to your family.
Then rank your debts from smallest to largest. Make your regular payments on all of your debts, but throw extra money at your smallest debt. Once that debt is paid off, move onto your next one.
You can also rank your debts in order of importance. Focus on keeping your house and family connections. Then work on your credit card and other expenses.
Notify your debtors in advance if you cannot make your regular payment. They may be able to adjust your payment plan. Even if they cannot, advance notification will build trust between the two of you.
Keep all of your paperwork on hand, including any description of your debts. The more documents you have, the stronger a defense you can mount.
Respond to the Lawsuit
You will receive a summons or written complaint when a debt collector has filed a suit against you. Do not panic. You will not be removed from your home right away.
Gather your thoughts, then respond to the lawsuit as soon as possible. Touch upon each allegation in the complaint. You can admit some are true while denying others.
Your response is your first opportunity to launch a legal defense. You can state that the statute of limitations for the debt has passed. You can argue the plaintiff does not have the standing to bring a lawsuit forward.
Even if your response is short, you should still file one. If you don’t, a judge can rule against you automatically.
Be Aggressive
The burden of proof rests with the plaintiff. They must prove that you are responsible for a specific debt and that they have the right to sue you. They must find evidence supporting each of these points.
Attack your collector on the burden of proof. They must account for every dollar you owe. Even if you owe them some money, showing that they don’t have proof of all your debt will reduce the amount you need to pay.
They also must show how much has been borrowed and paid. If they don’t have proof, petition the judge to dismiss the lawsuit.
It is very hard for debt buyers to meet the burden of proof. They did not enter into a contract with you, so they must show the original creditor transferred your debt to them. Push hard on your buyer to produce a document showing the transfer.
You can file a countersuit with your collector. The Fair Debt Collection Practices Act regulates how debt collectors can operate. If they threaten you with violence or misrepresent themselves, you can file a suit against them.
Examine Multiple Defenses
You have many defenses, in addition to pointing out that your collector did not prove their case. A debt buyer may sue you for debts that you discharged during bankruptcy. This violates the law, so you can petition the judge to dismiss the lawsuit.
They may sue you for debts that a family member made on your credit card. You will need to prove that your family member made those debts. But they cannot sue you for something someone else did.
The reason you fell behind on your debts is not a defense. It does not matter if you had a family or health emergency. Your defense does not excuse the debt; it challenges your plaintiff’s accusations relating to your debt.
Contact a Lawyer
You can handle a debt collection case on your own. But your process will be far easier if you contact a lawyer. They have financial expertise and a team of associates who can investigate your case.
Try to find one early on in your case. At a minimum, you should have a lawyer when you are going to court.
You can approach a finance lawyer, but you should find someone with a specialty relating to your situation. If you are dealing with credit reporting bureaus, contact an FCRA Litigation Lawyer.
Find someone with experience in court appearances and out-of-court settlements. Many lawyers have more experience in the latter than the former. If you are pushing for a court appearance, make sure your lawyer can perform well in front of a judge.
Allow your lawyer to contact your accountant or financial advisor. The two of them should meet and discuss your credit history and financial portfolio.
How to Defend Yourself Against Debt Buyers
Debt buyers and collectors will try to sue you. Manage your debts on time to discourage them from a lawsuit. File away your contracts and descriptions of your debts.
Respond to the lawsuit and address each accusation. Push the collector to provide proof for each of their claims.
Pursue multiple defenses, including by challenging the collector’s legal standing. Contact a lawyer who will represent you in court.
You can promote your finances once you have the facts. Follow our coverage for more financial guides.
