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Defending a Debt Collection Case

Defendants in a debt collection lawsuit often hesitate to contact an attorney.  Their reluctance to engage the services of an attorney is often a result of embarrassment, or the thought that they cannot afford one.  However, as discussed below, retaining an attorney to represent you in the defense of a debt collection lawsuit can often result in the savings of thousands of dollars.

First, an attorney can respond on behalf of the debtor.  Typically, the “notice” from the creditor will arrive at the debtor’s residence in the form of a summons and complaint.  Many debtors simply assume that there is not much they can do, and fail to respond.  Failing to respond, whether pro-se (representing yourself in court) or through an attorney, will quickly open up new avenues for the creditor to collect on the debt.  By failing to respond, the creditor will request a default judgment for the amount owed, plus court costs, and possibly even attorney fees.  Once the judgment is entered, it is typical that post judgment interest on the unpaid judgment will begin to accrue. Additionally, once judgment is entered, the creditor now has the authority to request garnishment of the debtor’s bank account or wages, and can even place a lien on real estate.

If you retain an attorney to represent you in the defense of a debt collection lawsuit, the attorney can properly respond on your behalf.  Many defendants in a debt collection lawsuit simply feel that there is nothing they can do.  However, an attorney representing them can properly defend or negotiate a favorable settlement that could result in savings to the defendant that far exceed the costs of retaining an attorney.

DO NOT FAIL TO RESPOND: “PRESERVE YOUR RIGHTS”

A good attorney will respond to the summons and complaint on behalf of the defendant and also challenge the lawsuit.  It is important to note that a defendant has rights, and the burden typically falls upon the Creditor to prove its case by a preponderance of the evidence, which means that it is more likely true than not true that the debt is owed to the creditor.  While that may seem like an easy burden to overcome for the creditor, there are several challenges that can be made.

STANDING:  “DO THEY OWN THE DEBT?”

First, an attorney can challenge the standing of the creditor to sue in their own name.  Many debt collection lawsuits are brought forth from “Third Party Debt Purchasers”, meaning that they are not the original creditor, and purchased the debt from someone else.  Typically, these third party purchasers file a lawsuit in their own name as Plaintiff.  A challenge can be made to the Court that the Plaintiff does not have standing to pursue the specific debt.  If the third party purchaser does not have the proper documentation that it owns the debt, then the case may be dismissed.

STATUTE OF LIMITATIONS:  “HOW OLD IS THIS DEBT?”

Second, it is always important to review and investigate the Statute of Limitations in whichever jurisdiction the lawsuit is filed in.  A creditor always has a limited amount of time (for example – 6 years) in which to bring a lawsuit on a debt.  If it can be shown that the Statute of Limitations has passed, then the lawsuit may be dismissed.

DISCOVERY:  “DO THEY HAVE ENOUGH EVIDENCE TO PROVE THEIR CASE?”

Last, an attorney can defend you and make the creditor “prove” what you owe.  An attorney is familiar with the local rules of trial procedure and statutes and can send discovery requests to the creditor.  It is simply not enough to allege that the debt is owed in a simple complaint for damages.  The creditor must also be able to produce enough documentation to show the Court and the defendant that the amount they are claiming is accurate.  If the creditor is unable to produce sufficient documentation, then the defendant will likely prevail in the lawsuit.

However, the most important aspect of retaining an attorney to represent you in the defense of a debt collection lawsuit is having an advocate on your behalf. Whether the course of action is to strongly defend the lawsuit, or pursue a favorable settlement, an attorney can provide counsel and relieve the stress and burden of taking the fight up on your own.