Managing Debt

Seven Ways To Defend a Debt Collection Lawsuit

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What happens when you are sued by a debt collector? While it may feel like the end of the world to you, it’s a pretty routine occurrence in courts across the country. “Most debt collection law firms file hundreds of lawsuits a day, assuming that 99% of defendants will not answer,” explains Atlanta bankruptcy attorney Jonathan Ginsberg.

While it would be easy to dismiss these as simply a matter of debtors getting what they deserve, it’s not always cut and dried. It’s not unheard of for a debtor to be hounded by multiple collection agencies for the same debt. Or “zombie debts” may show up in court years after the debtor defaulted.

A recent New York Times story compared the recent spate of debt collection “robo-lawsuits” to the “robo-signing” mess in the mortgage industry and quoted Brooklyn Civil Court Judge Noach Dear as saying, “roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.” Judge Dear says he sees as many as 100 of these cases a day.

Even when debts are legitimate, the additional costs that result from a lawsuit can make it that much harder for the borrower to resolve the debt.

So what can you do if you are sued by a collection agency? Here are seven options:

1. Respond

The number one mistake borrowers make when they are sued for a debt is failing to respond to the notice, which usually arrives in the form of a “summons and complaint.” If you owe the debt and can’t pay it, then you may assume there’s not much you can do. If you fail to respond, however, the collection agency will get a default judgment against you. That opens up new avenues of collection for them, including wage garnishment or the ability to take money from your bank account, depending on state law. Worse, the collector may be able to add attorney’s fees, court costs, or interest to the balance. In some cases, the balance can double or triple due to these additional costs.

Responding to a debt collection lawsuit, then, is a must. “Even if you owe the plaintiff money, a two-sentence response denying liability to the lawsuit filed in court will likely lead to a negotiated settlement that will save you money,” advises Ginsberg.  “If you do respond and force them to work, they will either back down or offer a settlement on favorable terms.” He adds that it is not sufficient to simply send a letter to the plaintiff (the person bringing the lawsuit). “You must file your response to the lawsuit, called an “Answer,” in the court where you were sued within the designated time to respond — usually 20 to 30 days after service — and you must send a file stamped copy of your answer to the plaintiff’s lawyer.” You can get a file stamped copy from the court where you filed the answer.

When you do respond, don’t just state that you can’t afford to pay the debt. “If you admit liability then 90% of the fight is over and they are not forced to prove their case,” warns Billy Howard, attorney and head of the consumer protection division of Morgan & Morgan. He likens it to a criminal case where the defendant says, “I did it!”

2. Challenge the lawsuit

“Challenge the plaintiff’s ability to bring the lawsuit by challenging their standing to sue in their own name,” suggests Ohio consumer lawyer Troy Doucet. He explains that credit card debt is often bought for pennies on the dollar, by collection agencies, which then sue to collect. “The collection company needs to prove they have the right to collect, as evidenced by a transfer of the signed credit card agreement, in order to be in court and ask the court to win.  The right to sue is called ‘standing’ and what the consumer should challenge.”

Howard agrees: “Ask the court to dismiss the case because they don’t have standing and lack the chain of custody of paperwork. A lot of judges look at the paperwork (collectors provide) and tell the plaintiff that they must be joking.”

3. Make them prove what you owe

“We always demand to see the original signed agreement and a balance on the account from zero to the present,” says Ginsberg. More of than not, the debt collector’s documentation will be inadequate.  Debts may have changed hands multiple times before the current collection agency purchased them.

Even original creditors may lack accurate documentation of the debts customers owed. A former employee of JP Morgan Chase says she was fired after she raised questions about the documentation being provided to buyers of the issuer’s delinquent debts. She alleged that as many as a quarter of the files showed incorrect amounts owed, with errors often in the bank’s favor. If credit card issuers can’t provide accurate documentation, there’s a good possibility collection agencies won’t have it either.

4. Raise the statute of limitations as a defense

In most states, creditors have a maximum of four to six years to sue to collect a debt. After that, the statute of limitations expires. That doesn’t always stop collectors from suing, however, because they are counting on borrowers failing to show up in court. If the statute of limitations has expired, and the borrower raises that as a defense, the collector will lose. Making a payment on an old debt may start the clock ticking all over again, though, so a debtor should get legal advice before making a payment on a very old debt.

5. Sue them back

If a debt collector has violated provisions of the Fair Debt Collection Practices Act, you may be able to sue them. “Once you attach their lawsuit as Exhibit A to your lawsuit against them the tide turns, and if you or your attorney knows what they are doing, the alleged debtors can get damages and attorney’s fees and costs,” says Howard. He’s referring to the fact that consumers who successfully sue for violations of the FDCPA are entitled to statutory damages of $1000, plus punitive and economic damages, if awarded. In addition, the collection agency will be required to pay the attorney’s fees and costs.

6. Bring in the big guns

Debtors often hesitate to contact an attorney when they are being sued over a debt they owe; perhaps due to embarrassment, or maybe they figure they can’t afford one. Attorneys who regularly take on these types of cases, however, will typically offer a free consultation. And they will often represent a consumer for free if they think the collector has broken the law. That’s because they will expect to collect their fees from the plaintiff. “Do not be afraid or intimidated to call or email a consumer protection or bankruptcy lawyer for a quick word of advice,” Ginsberg says.

Once the collection agency is notified that you are represented by an attorney, it may be much more amenable to settling the debt, rather than trying to duke it out in court.

7. File for bankruptcy

While bankruptcy usually doesn’t make sense when you just owe a small amount of money, if the debt you are being sued for is large or if it is just one of many other debts you owe, it may make sense to file for bankruptcy. When you do, you will be protected by the “automatic stay,” which will halt collection efforts against you.

A tip: If you are thinking about bankruptcy, it’s best to talk with an attorney as soon as you are served with notice of the lawsuit, rather than waiting until the day you’re due in court.

While dealing with a debt collection lawsuit, it’s still important to keep an eye on your credit scores, and to periodically check your credit reports.  Though your credit has taken a hit, watching your credit can alert you to new potential problems that you can work to resolve before they become bigger problems. You’re entitled to your free annual credit report from each of the major credit reporting agencies.  And you can monitor your credit scores for free using a tool like Credit.com’s Credit Report Card, which updates your scores monthly, and gives you an overview of your credit profile.

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  • http://ccomwp.wpengine.com/2012/09/seven-ways-to-defend-a-debt-collection-lawsuit/ casing

    Can I recover anything from a previous case of 2007, for a foreclosure action that derived from the predatory lending blunder. A Hearing from the Greenspan and others stated before congress, stated that those loans were bogus. When I tried to recover, I was out done, because of the arbitration clause. I had all proof that I had paid until I lost my job, but the company had fail to service the contract, unbeknowns to me, the actual lending company was secretly filing bankruptcy and transferring all the clients payments into the bankruptcy. when the new company started raising the same mortgage payments, and charging bogus late fees of $37.50, and the payments weren’t late. I figured out what was going on, so I confronted them. I caught on to the trick of their merger. One company one start the loan process and run for about five years, then then file bankruptcy. The other company would then take over and start raising the peoples payments to some ridiculous payment from $308 to $1,800 and say you are behind on your payments. in the mean while, you are on the phone with a foreign English person that is asking you do you understand what I am saying. All of this is buying the first company time to file and complete their bankruptcy.

    I had them at one point, I started in 2002-2003 when I noticed that they were going up on a $308 payment. I was not late, until I lost the job, but I had been writing them to credit my account with 5 payments that they had not credited it with. I lost in an arbitration hearing, because the arbitrator said that he had a piece of paper in his hand where his boss had ruled that he had to settle my case off the log. i was tired after three or four hours of submitting all types of document that showed they were still in a breach of contract for failure to service the loan, misappropriation of payments.
    Note; This company that filed bankruptcy took all of the payments from 1999-2004 in the bankruptcy. I was told during my period of winning, that I could only get money from May 2003 to the present date in 2004. well that leads me to believe that they still owe me, because the new company received a trade-in, of a value of $6,000, 16,900, and my payments of about 19,900 for a $34,000. The past two weeks, I see their name calling me back to collect the 19,000 they couldn’t collect from the other company. I had paid over $19,000, and they received over 16,000 for the auction.
    Because the new company’s eagerness to shut my mouth, they hurried to get the case solved. They also wrote other clients and started the ripple affect of foreclosures.
    Is their any defense for those of us that were taken advantage of during those years. We do not qualify for the $8,000, of which I could use that amount right now. Not on another home, but back in my pocket.
    Is there any way to get the congressional hearing of the matter and use that as a defense supporting that the lender knew what type of loans these were.

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  • Maria

    They may be able to prove something and get some type of judgment. Judgments are dischargeable in bankruptcy in my state. I do no have a lot of other debt that I do not pay other than private student loans already in default and less than $1000 is medical debt. I just never have anything left over and have already payed thousands off. I do not pay them because I believe that they are incorrect or the cause of going back to the hospital was caused by them, I have one hospital that put $35 on my credit after getting into a pissing match with the billing girl over an $800 error they made. My credit will be ruined for years due to student loan, I really have no incentive to pay. I already own my home, have friends that can finance cars for me, and credit cards I pay on time. In other words after becoming disabled i gave up a long time ago.

  • Richard

    Can you provide me with stare decisis ruling against a debt collector consequent of a broken chain of possession (custody) of the alleged debt? Likewise for failing to produce an accounting evidencing the creation of the alleged debt? Of course, time is of the essence in that I’m already in discovery and approaching court-ordered mediation; In other words, your late response = no response. Thank you. R.

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  • http://www.credit.com/ Credit.com Credit Experts

    Daniel – There’s nothing that prohibits you from filing bankruptcy when you own a home and the property is paid for but you have to be careful here. If you own your home, there’s a chance the bankruptcy trustee will require the home be sold to pay your creditors. It really depends on your individual situation and your debts. When considering bankruptcy, we always advise consulting with a bankruptcy attorney so that you understand your options and make the best decision for your individual financial situation.

  • Kim

    If I made a payment PRIOR to getting notified that my account had been turned over to a collector by just a few days, am I still responsible for the collector’s fees? The creditor cashed the check. When the collector sent me a ledger showing payments, the date the ledger shows for cashing the check in question was cashed a month prior to what the ledger says and we have our bank statement as proof of this. So it leads me to somewhat question the accuracy of any of the dates on the ledger. Also, at this time, the creditor is sending the collector money each month to pay off the balance and that tells me I am not responsible for it. Any advise would be greatly appreciated.

    • http://www.Credit.com/ Gerri Detweiler

      Kim – I am not sure I fully understand the scenario. Are you saying you paid off the debt before it was sent to collections? If that’s the case then it should not be listed on your credit report as a collection account. You can dispute it with the credit reporting agencies and the collection agency reporting it.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    You should not have to pay anything if you paid the creditor off in full. There are some odd one off situations that can happen that require you to be proactive, if for no other reason than to make sure the debt is reflected accurately on your credit report.

    Would you mind posting a comment reply with more details?

    Who is the original creditor?
    Who is the debt collector?
    What is the balance they are saying is owed minus what you have already paid?

    • Kim

      WOW, thanks so much for the speedy quick reply. The creditor is my Home Owners Association. The collector is a local financial place. They said in the original letter, the one that came a few days after I had paid my HOA that I owed $630ish. We had sent the HOA a check for $299 which was the amount they said we owed including the late fees. They cashed the check. The collector is now saying we owe $652. I’m not sure they actually deducted the $299.

  • Gerri Detweiler

    My understanding is that it depends on whether the lawsuit was dismissed with prejudice (can’t refile) or without prejudice (can). But I am not an attorney so you’ll want to get legal advice. If you still live in Texas (guessing from TXGirl!) then you’ve got a great resource available to you in the Texas Consumer Complaint Center. http://www.texasccc.com/

  • Gerri Detweiler

    Heather – Please talk with a bankruptcy attorney right away. The fact that you can’t afford the debt is not typically a defense against one of these lawsuits, and if they get a judgment against you then it will make it easier for them to collect. However, given what you are saying, your income may be safe from creditors and the attorney may be able to help you get them to drop this case. The first consultation should be free. You can also find out if there is a legal aid clinic in your area that can help you for free.

  • Gerri Detweiler

    Your mother in law has put your husband in a terrible dilemma. She committed identity theft and if he doesn’t want to pay this bill he’s going to have to be willing to file a police report. Otherwise, he is going to have to try to resolve the debt with the creditor. There is some good information about the problem of family identity theft here.

    As for the garnishment, I suggest you both talk with a bankruptcy attorney. He doesn’t necessarily have to file, but the attorney will be able to explain his options with regard to the garnishment.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    It sounds like you have given up Jim. If you legitimately do not believe the bill required your prior approval, and that the fees are not justified, you need to participate in the court process.

    I hate to have to say this, but you may need an attorney to help you fight off another attorney. It would be best to work with a skilled collection defense attorney.

    Yes, you can negotiate a reduced settlement in this kind of scenario. But doing that means having the funds available to pay the agreement you reach. Are you in a position to pay a reduced settlement?

    If there is a judgment entered against you, your wages could be garnished (depending on the state you live in), and your bank account could be levied.

  • Jill

    If I just went to court (before reading this article) and a judgement was made against me, is there anything else that can be done in the fight (other than bankruptcy). Can I sue them back and force them to provide the documentation you note in your article… or am I too late? They wont work with us. We are currently on one income as my 5 year old son goes through cancer treatments. They didn’t care, however. I wish I had read your article BEFORE we went to court. The debt collector didnt even show up probably because they know the average Joe knows nothing.

    • http://www.Credit.com/ Gerri Detweiler

      You can try to get a consumer lawyer to challenge the judgment. Search Naca.net for one in your area. If you have a valid defense, the attorney may be able to get the judgment vacated. As you mentioned, the other option may be bankruptcy.

      Jill – I’m really sorry to hear about your son and hope he responds well to his treatments.

    • Tanya

      If you had paid what you owed you wouldn’t have been taken to court. I’m sure you didn’t care when they were calling you to collect the debt so why should they care about your situation and your sons?

      • Nancy May Antram

        Maybe she was busy taking her 5 yr old to the hospital when they called. Have a heart and grow some compassion.

    • Camden

      Its a terrible stress having debt to deal with let alone dealing with a child having cancer. I cannot imagine how awful it must be, sending you prayers for your little boy that he beats cancer. Stay strong.

  • http://www.credit.com/ Credit.com Credit Experts

    Uninsured motorist coverage is mandatory in some states so it may be worth contacting your insurance company and seeing what they say about your state and the policy. They may be able to give you advice about your options and what to expect when something like this happens. Unless your insurance policy included an uninsured motorist coverage, small claims court may be the next step.

  • MNguy

    Hi & Thanks

    A collection agency just drained my bank account on an old credit card debt. I had asked them to verify the debt but all they sent me was a disclosure form from the orig CC. (THat didnt seem enough to me)

    IT was 2 years ago and i dont have much of the paper work and i moved out of state. They took all my money to live on. I had funded the bank account from my 401k too. I dont know what to do?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      I would encourage your next step be contacting an attorney about your options. Few attorneys specialize in collection defense, and mitigating the results of collection activity that you are experiencing. You want to consult with an attorney who has a practice that focuses in this area. I would try to locate one near you through http://www.naca.net – select find an attorney, then narrow your search by state. Most of the attorneys you contact using that site as a resource will offer a no cost initial consult.

  • http://www.credit.com/ Credit.com Credit Experts

    Lebo, you won’t go to prison. This article actually explains in depth the steps you need to take to defend the lawsuit so we’d encourage you to re-read through it and follow the advice that Gerri gives above. The absolute worst case scenario would be that the creditor would be awarded a judgment against you, which means you’ll eventually have to pay the debt and they could garnish your wages or seize your bank accounts depending on your individual state laws. However, if after reading this article you still have questions and need help defending yourself in court, we’d encourage you to seek the advice of an attorney. A good place to find one in your area is http://www.NACA.net. It sounds terrifying, but if you can negotiate with them prior to the court hearing, that would be your best bet.

  • http://www.credit.com/ Credit.com Credit Experts

    Mark – paying a collection lawsuit won’t automatically remove the record from your credit report. Instead, the collector will update the record to show that it’s been paid, but it will remain in your credit report for 7 years from the date the account first went to serious delinquency status. Paying a collection won’t improve your credit score, but it will keep things from getting worse. You can read more about this topic in the following resources from Credit.com:

    Will Paying a Collection Improve My Credit Score?
    Will Paying a Collection Account Remove It From My Credit Report?
    How Long Does Negative Information Stay on My Credit Report?

  • GottaFaceIt

    Would you please tell me which state’s SOL would apply for a Discover card debt originally incurred in Massachusetts (6 yrs), for a current TX resident (4 yrs) or DE (3 yrs) since Discover is a DE corp? And would the venue be District Court in the county where I now reside? I have not been served, and was trying to find if they had filed suit by looking at online dockets for my current county and within 150 miles. Would Discover typically file a pre-suit notice? Does Discover sell their debt to 3rd parties or collect through an attorney? Would the date of last activity be the date I last made payment or the date I called them to discuss settlement? an if the latter is the case, how do they prove that date, with a recording of the phone call? I can not remember if the discussion involved an admittance of what I owed. Would that matter to ‘restart the clock’ on the SLO?
    Thank you. Very helpful answers to others’ questions.

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      You will want to get your SOL and other legal questions addressed by an experienced debt defense attorney in Texas. Most of this type of attorney will offer a no cost initial consult.

      Generally speaking, the SOL in your current state of residence would apply. But there are instances where you could bring the creditors “home” state SOL as a defense against a collection suit.

      Venue is often determined by your county of residence, and also the amount of the debt being collected.

      Discover has not been an active debt seller in the past few years. And they do work with attorney debt collectors frequently.

      The date of last activity is generally the last date a payment was applied to the account. I understand the concern about accounts being re-aged for collection purposes if the debt is admitted, but I just do not see many creditors use later calls regarding collections, or payment and settlement discussion, as a means to restart the clock. This is definitely something you should discuss with an experienced consumer law attorney in your state.

      My overwhelming experience is that Discover will first place an account with an in state attorney, who will send at least one written collection notice prior to filing a collection suit.

      Do they have your correct address?
      Have you received any collection notices from attorneys in your state? If so, when?
      What is the amount being collected?
      When did you last make a payment?
      What is your goal with this account?

  • http://www.Credit.com/ Gerri Detweiler

    Tom –

    Talk with a consumer law attorney. You may have a defense to the lawsuit. Most consumer law attorneys who regularly handle these kinds of cases will offer you a free or low cost consultation. Visit Naca.net to find one.

  • http://www.credit.com/ Credit.com Credit Experts

    Dawn –
    If the hospital is willing to accept payment, ask them to pull the bill back from the collection agency. We wrote about that here: Reader Stops Mysterious Medical Bill From Damaging Her Credit That could also help get it off your credit reports (simply paying it won’t do that).

    If you pay in full in advance, don’t wait until it goes to court — send the collection attorney a certified letter with the receipt showing it has been paid. Unfortunately, we don’t know whether the collector can still charge a fee at that point. We’d suggest you talk with a consumer law attorney asap.

  • http://www.credit.com/ Credit.com Credit Experts

    One of the problems with co-signing is you may not know a bill is going unpaid until it affects your credit. When the bill isn’t paid for whatever reason, the lender tries to collect from the co-signer. (In fact, the lender anticipated this; that’s why a co-signer was needed.) One way to address the problem of a co-signer not knowing about late payments is to have the payments sent to the co-signer’s address. You can have the borrower send payments to you, and then you can pay the creditor. That way, you can know for sure payments are being made (because if they aren’t, you could be held responsible for payments and late fees — and your credit score would also take a hit). The best advice about co-signing is not to do it. Here’s a post about how co-signing can affect your credit score.
    <a href="http://blog.credit.com/2013/06/co-signing-affect-credit-score/&quot;

  • http://www.Credit.com/ Gerri Detweiler

    I would really encourage you to talk with a consumer bankruptcy attorney asap. The attorney should know what your rights and recourse is for this debt and at least try to help you avoid getting a judgment against you, which would lead to further problems for you. Visit Nacba.org to find one. They should offer a free or low-cost consultation. Another option is your local legal aid office. Some are very good.

    Please reach out to an attorney asap. You may not have much time to challenge this.

  • http://www.Credit.com/ Gerri Detweiler

    Kris – Your concern is valid. If wage garnishment is allowed in your state then they may be able to try to garnish your wages if they successfully sue you. My suggestion is that you talk with a consumer law attorney to find out what your options are – and what can happen if you aren’t able to pay or resolve this. Consumer bankruptcy attorneys are very knowledgeable in these matters and you should be able to get a low-cost or free consultation.

  • http://www.Credit.com/ Gerri Detweiler

    Check your credit reports. Your judgment should be listed on there. If there is none listed, then you may be dealing with a scammer – hard to tell.

    As for the new collector, judgments are bought and sold. So it’s possible that happened. Or it’s possible your debt was sold multiple times and one company got a judgment the other didn’t know about.

    So request written documentation from the second collector, and do a little digging to try to find out exactly what’s going on. (You can talk with the collector, too. They may simply not be aware of what happened with this debt.)

    You may find this helpful:

    Creditor Gets A Judgment: Now What?

  • ESinAZ

    I am being sued for my ex-husband’s defaulted credit card. I have no notice of this until I was served with court documents very early in the morning. How do I fight this? Who should I contact?

    • http://www.Credit.com/ Gerri Detweiler

      Was this a joint account you shared with your ex? If so then you are jointly and individually liable for the debt and the credit card company may try to collect by all legal means. If it is not a joint debt, do you live in a community property state? If so, and the debt was incurred after your marriage then it’s possible they may be able to pursue you for payment.

      Regardless, I would really encourage you to talk with a consumer law attorney as soon as possible to find out what your rights and options are in this situation. You can locate one at NACA.net.

  • http://www.Credit.com/ Gerri Detweiler

    chericaa – Unfortunately we don’t have a sample letter. Can you talk with a consumer law attorney who represents consumers in debt collection cases? If the debt collector is breaking the law they may be willing to represent you for free. Another option may be to show up in court and explain to the judge that the debt is too old. (It always makes me nervous, though, to have consumers show up without legal representation. The other side will have lawyers and you’ll be at something of a disadvantage.) There may also be a legal aid service in your area that can help you for free.

  • http://www.Credit.com/ Gerri Detweiler

    I wish we could help but these are legal questions that really require an answer from an attorney.

  • http://www.credit.com/ Credit.com Credit Experts

    First, we’re not lawyers and cannot offer legal advice. That said, we’d want a lawyer to look over the documents involved. Good luck to you.

  • http://www.Credit.com/ Gerri Detweiler

    Mac – Please talk to a consumer law attorney who handles bankruptcy and similar matters immediately. You can visit Nacba.org for a referral to one in your area. They should be able to answer your question or point you to someone who can.

    And our condolences for your loss.

  • Gomali G

    I moved two years ago and the Post Office no longer forwards mail. If the Debt Collectors do not have my current address, how will I know if a lawsuit has been filed against me?

    • http://www.Credit.com/ Gerri Detweiler

      That’s a good question. It is possible you could be “served” at your old address and not get the notice.

      However, debt collectors are pretty good at skip tracing. They use credit reports and other databases to find consumers.

      Still, it would be a good idea for you to get your free annual credit reports to make sure your address is up to date on all of them.

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      I would add:

      You can contact any collection agency or debt owner and update them with new information and keep a record of that.

      But if you are trying to keep a low profile, but still concerned about not knowing you were sued, set a weekly/bi-weekly calendar reminder to check the relevant courts records for that prior address and search for your name. This could be hassle free if those courts provide electronic access, as many do these days.

      I can offer additional feedback about your risk profile if I knew:

      Name of original creditor?
      Name of last debt collector contacting you?
      If the account was already placed with an attorney collector, who that is?
      Who, if anyone other than your original lender, is showing this debt on your credit report?

  • http://www.credit.com/ Credit.com Credit Experts

    Ken –
    We are not lawyers and cannot give legal advice. However, because you are being sued, you might want to hire a lawyer to represent you.

  • http://www.credit.com/ Credit.com Credit Experts

    Vincent –

    Sorry you got a letter like that on Christmas Eve. Ask the collection agency to verify the debt. This is your right. Here is a Credit.com resources describing rights you should be aware of: Understanding Your Debt Collection Rights

    Good luck, and let us know what happens.

  • http://www.credit.com/ Credit.com Credit Experts

    Once a loan has been sold to a collection agency, that loan is no longer owned by the original lender. If you are considering bankruptcy, though, we encourage you to seek the help of an attorney — and to be sure you have a clear understanding of what you are doing. For more, see 5 Bankruptcy Myths Debunked.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Shelly – Anytime you are dealing with collections in the courts it is a good idea to run your scenario, and questions, by an experienced consumer law attorney in your state.

    Generally, beyond the balance being asserted as owed, collection costs in the courts (at least for this type of unsecured debt) can often include:

    Attorney fees (they have that outlined already).
    Court costs (filing fees and the like).
    Prejudgment interest (if allowed)
    Post judgment interest (set by the court and capped in most states).

    If you agree to pay in a single payment, or over a series of payments, get the entire agreement in writing prior to paying. Be sure you understand every part of the agreement. You can post questions for general feedback, but should connect with an attorney of your own too.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Kay – From what you shared I would encourage you to speak with an experienced FDCPA attorney about the threat of being sued for collection. That type of threat is real enough. Collectors do sue after all. But it is not something that should be said as a collection ploy, and if there is not plan or intention to sue. You shared enough detail to raise at least some skepticism about there being any intent to sue.

    Check out naca.net for an experienced collection violation attorney. This type of attorney will generally offer an initial consult at no cost. And often enough, take FDCPA claim clients on without charging a retainer.

  • SeeYouToo

    I was just served a notice. I live in California. I looked all over the court website for a form to use in response. Why do they make it so hard? I can’t find anything. What format should I use to respond? Do I get it stamped by the courts and then serve the plaintiff?

    • http://www.Credit.com/ Gerri Detweiler

      You’re right. They often leave it up to the lawyers to respond. We can’t help with that, unfortunately. You may want to try to contact a consumer law attorney in your area for help.

  • http://www.Credit.com/ Gerri Detweiler

    Have you checked your credit reports to see if a judgment has been entered against you?

  • http://www.Credit.com/ Gerri Detweiler

    I can’t think of any scenario that would prompt this. But to be safe, I suggest you contact the Texas Consumer Complaint Center. They are a great resource and should be able to help: http://www.texasccc.com/

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    With a property lien in place, judgment creditors are often reluctant to work with you. You can indeed offer a reduced settlement, but will should be realistic about what they will accept.

    How much is owed? How much time do you need to raise the funds to settle with them?

    • Justneedmoretime

      I owe about 4500.00 this includes lawyer fees and late fees. I plan on paying the debt, but simply need more time… about a year. I am not planning on moving since I have a lien on the property. I am hoping that since they worked with me once, they will work with me again.

      • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

        How much of your agreed monthly payments can you afford to make? Are your current HOA dues being paid?

        How did you respond to the summons you received 3 weeks ago?

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    AJP – Yes, there are differences. It would help to know what state you are in, and whether it is the home equity loan originator that is suing, or a successor, or debt purchaser is suing.

    I can offer more feedback if you post more of those details.

    It is always best to consult with an experienced attorney of your own when sued. You should look to connect with a debt collection defense, or foreclosure defense attorney, licensed in your state. Most of this type of attorney offer a no cost initial consult, and it is a great way to get your bearings about your options and next steps. Try to locate one in your city, or one nearby, at http://www.naca.net

  • http://www.Credit.com/ Gerri Detweiler

    Crystal – what state did this take place in? Did the attorney’s office identity themselves?

  • http://www.Credit.com/ Gerri Detweiler

    It sounds fishy to me. I am not an attorney but according to my sources the statute of limitations for most consumer debts in Georgia is 6 years. It sounds like that time period has elapsed.

    If you get an actual court summons then you can deal with that, but my guess is they are just trying to scare you into paying something.

    In all of these situations where a collector calls and tries to get consumers to pay by phone while threatening dire consequences, my response is the same: Tell them to put it in writing.

  • Jamie

    The debt collector and I came to settlement after suit was filed. I have something in writing with the settlement agreement, but still have not received the papers they said they would be sending for me to sign so that they could send them to the court. I am worried about a “default judgment” being entered even though a settlement has been reached. I have called twice and they told me that it is in their records that a settlement has been reached and there is nothing else I need to do until we receive the paperwork. Should I be worried?

    • http://www.Credit.com/ Gerri Detweiler

      I would be concerned too. However, if your settlement agreement clearly states they won’t proceed in court, then you’d have something to back your side of the story up if they didn’t keep up their end of the bargain. (I assume the agreement is clear on that?) I can’t give you legal advice, but if I were in your shoes, I would continue to do what you are doing and be a squeaky wheel!

  • A.G.

    Hi Gerri, I have a private student loan that I am being sued for. I have already been served so I know there really is no escaping this situation and believe me I am not trying to escape I am just looking to resolve it. The student loan amount is over 100k do you think realistically there can be a settlement agreement for something under 30% of what I owe? I really need some answers because it is alot and I am not dealing too well this. I have high blood pressure and everytime this situation comes up i get super depressed.

    • http://www.Credit.com/ Gerri Detweiler

      I wish I could say “yes” but it’s tough. Without the option of bankruptcy, they have no incentive to settle – especially for such a small amount. I would really recommend you talk with a consumer lawyer well versed in student loan issues. You can visit Joshua Cohen’s site TheStudentLoanLawyer.com for a free 15 minute consultation. I’d recommend you start there.

  • http://www.Credit.com/ Gerri Detweiler

    Yes, it’s worth a try. Collection lawsuits are often settled before they go to trial. You may want to read this articles first: Seven Ways To Defend a Debt Collection Lawsuit as well as articles by our contributor Michael Bovee who writes a lot about settlement.

  • http://www.Credit.com/ Gerri Detweiler

    John – Contact a consumer law attorney. If they believe the law firm (which likely qualifies as a collection agency) is breaking the law, then you won’t have to pay the attorney’s fees. That’s because in the case of FDCPA violations, the collector will have to pay the attorney’s fees.

    And even if they don’t feel you have a good case, it will be well worth it for you to pay for a couple of hours of their time to get some advice on how to handle this yourself. The other side will have attorneys who understand court procedures and you will have to be well-prepared to defend yourself. Plus the attorney can tell you how these kinds of cases typically proceed in your area.

    This is not a small amount of money, and if you can prevent a judgment from being entered against you, it will be well worth it.

    • john

      Would it be advantages to file the dispute first asking for a copy I the contract as well as payment. Billing inquires so I can consult with an attorney and have paperwork in hand ? This way we can see what information is available to me. Thank you for your help on this matter.

      • http://www.Credit.com/ Gerri Detweiler

        I just don’t know how the procedures work in your state and don’t want you to end up in a situation where an honest misstep results in a deficiency judgment against you.

    • Keynan Kinard

      I have a court next week. Involving me not making payments since October. What’s the outcome I can expect by going to court on, next wednesday?

      • http://www.Credit.com/ Gerri Detweiler

        If you don’t raise a defense to the lawsuit then you can expect a judgment to be entered in favor of the creditor/collector. Once you have a judgment against you it likely opens a new set of collection options. However, consumers can often be successful challenging these lawsuits. That’s why I suggest you talk with a consumer law attorney with experience in these issues.

        Please also read: Creditor Gets a Judgment Against You – Now What?

  • http://www.Credit.com/ Gerri Detweiler

    It sounds like the case was dismissed due to any activity – which means just what it sounds like. The plaintiff didn’t follow through and It’s been dismissed. If they had obtained a judgment then you should see one on your credit reports.

    Does it say dismissed with or without prejudice? If it was dismissed without prejudice (which would be likely in this type of situation) they can refile.

    Please note, though, I am not an attorney and this isn’t legal advice. If you are worried about a debt collection lawsuit I recommend you talk with a consumer law/bankruptcy attorney.

  • Sed

    I’m being sued for a loan I couldn’t afford to pay anymore, because I lost my job and I’m still jobless. Now the loan company is calling it fraud because while trying to collect the automatic payment I switched banks because they kept putting my account in default. And I ended I owing the bank every week. Can I include this debt in my bankruptcy ?

    • http://www.Credit.com/ Gerri Detweiler

      I don’t see why not, but the person to ask is a bankruptcy attorney.

  • http://www.Credit.com/ Gerri Detweiler

    Are you really being sued or are they just threatening to sue? Are you dealing with a legitimate collector?

  • http://www.Credit.com/ Gerri Detweiler

    You don’t have to wait to be served with a lawsuit to file bankruptcy, and if you are even considering going that route I recommend you talk with a bankruptcy attorney sooner or later.

  • http://www.Credit.com/ Gerri Detweiler

    I don’t know Beth.

  • http://www.Credit.com/ Gerri Detweiler

    The Fair Debt Collection Practices Act is very clear on venue.

    (a) Venue
    Any debt collector who brings any legal action on a debt against any consumer shall—
    (1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or
    (2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity—
    (A) in which such consumer signed the contract sued upon; or
    (B) in which such consumer resides at the commencement of the action.

    You don’t live in Utah – did you sign the contract there?

  • Cindy

    I am getting served for a car loan debt that is not mine. I did not sign for it. It is my boyfriends, and they have not repossessed the car yet. Why is my name on the suit filing. ? I looked up filed suits in my county to see who was trying to serve me and why- I am in Texas. The insurance is in my name, but that is it. Depending on out come will this go on my credit? How can they have my name added to this filing?

    • http://www.Credit.com/ Gerri Detweiler

      Here is the good news Cindy. In Texas you have a terrific resource called the Texas Consumer Complaint Center http://www.texasccc.com/. They should be able to point you in the right direction. If not, I would encourage you to talk with a consumer law attorney about how to respond. It doesn’t sound like you should have been sued but you need to respond in order to stop the action against you.

  • http://www.Credit.com/ Gerri Detweiler

    It sounds like you are dealing with a debt collection scammer. That would be a very old debt and in most states outside the statute of limitations. 9 Signs You Are Talking to a Debt Collection Scammer

  • http://www.Credit.com/ Gerri Detweiler

    Vince – This is a question for your bankruptcy attorney. Can you contact him or her?

  • http://www.Credit.com/ Gerri Detweiler

    Ask your mortgage loan officer what kind of documentation you need. Typically they can fax a letter on letterhead but an email would not be sufficient. Your loan officer should know what will satisfy the underwriters.

  • http://www.Credit.com/ Gerri Detweiler

    Here’s what the FDCPA says about venue:

    (a) Any debt collector who brings any legal action on a debt against any consumer shall –

    …(1), bring such action only in the judicial district or similar legal entity –

    (A) in which such consumer signed the contract sued upon; or

    (B) in which such consumer resides at the commencement of the action.

    I don’t know if they are allowed to bring the suit in Michigan where you work since you live outside of the country but it doesn’t say that is permissible.

    I am going to have to recommend you talk with a consumer law attorney to get clear on your rights here.

  • http://www.Credit.com/ Gerri Detweiler

    In most states judgments can accrue interest. I am not saying they have calculated it correctly but it’s possible that they were adding interest charges. We wrote about that here: Can a Debt Collector Double My Debt? Have you asked the attorney’s office how they arrived at that amount? If I were in your shoes, I would put that request in writing via certified mail.

    If they don’t provide a satisfactory response and you really don’t want to talk with a consumer law attorney then you could try filing a complaint with the Consumer Financial Protection Bureau.

  • http://www.Credit.com/ Gerri Detweiler

    Sabrina – You may be able to get the motion vacated if you were not properly served notice of the lawsuit, but you’ll likely need the help of a consumer law attorney to pursue this. You may want to start by contacting your state attorney general’s office to see if they know of other complaints like yours against this company. You can also find a consumer law attorney by visiting Naca.net. We’ve written two other articles that discuss this issue: How to Kill Zombie Judgments on Your Credit Report and Help! I Found a Judgment on My Credit Report

  • Diana

    Hello… I just got served with court papers (sued) for a debt from a few years ago (creditor). I live in California. Papers state I have 30 days to answer back to court. A bit nervous/scared since I don’t know much on what to do. I do owe the money and had some financial hardship issues in the past but do want to take care of the matter. I don’t have all the money up front. I don’t want any serious issues, more money owed and mainly my credit getting hurt even worse (hoping to purchase a home soon). What can I do? Need some advise… Can I try to fix this without going to court?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      Collection lawsuits can be resolved without a judgment. Ideally, I suggest you look at all of your options to pay the debt by negotiating a settlement when you cannot afford to pay all of it.

      How much are you being sued for?
      What amount of money can you pool together to settle?

    • Parrot Sarnoso

      Diana, you need to answer the Complaint as soon as possible!!

  • http://www.Credit.com/ Gerri Detweiler

    Dee – I am so sorry I don’t know. Probably the state in which the contract was signed, but I am not certain.

  • http://www.Credit.com/ Gerri Detweiler

    So sorry to hear that. First, for the tax issues, you should be eligible for voluntary tax assistance. If they can’t help, I would suggest you contact the Taxpayer Advocate’s office. The Complete Guide to Finding Tax Help

    As for the debt collector, it may be proper service if they can’t otherwise locate you. I can’t say for sure as it depends on state law. But you must respond. I’d suggest you reach out to a legal aid office near your relative’s address. They are usually willing to help or at least point you in the right direction. You need to do this asap before a default judgment is entered and makes your life that much more complicated.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Diana – Because you are being sued, you should talk with an experienced debt collection defense attorney about your options.

    Some additional things to consider:

    If you want to take care of this yourself, without the additional cost of an attorney, you generally have to do that through the attorney collector suing you at this point. Calling their office to discuss settlement and putting a stop to this, is unavoidable.

    I am not a fan of monthly payment plans at this stage of collection, and for those who are concerned about their credit rating. That is because the payment plan is often only accepted if you consent or stipulate to a judgment. I do understand when there is no alternative to affordable monthly payments, and they are a good way to get an agreement in place so as to avoid wage garnishment, lines and bank levies (where applicable).

    If you were to settle this in one lump sum, depending on the creditors policies, the collection attorney, and your financial hardship, you could target anywhere between 50 to 100%.

    I understand you are worried about other bills, and falling behind. It is what it is sometimes.

    What amount of money can you pool together from whatever sources in order to settle this in one payment?

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    There may be nuances to that process, but generally, yes they can.

    If you are concerned about how that is possible, and how you may be able to defend against the collection action, try locating an experienced debt defense attorney near you through http://www.naca.net

  • http://www.Credit.com/ Gerri Detweiler

    Glynda – I would really encourage you to get help from an attorney if at all possible. They will be represented by an attorney and you should too. Do you have a legal aid office in your area? That is one place to try. If not, consider talking with a consumer bankruptcy attorney. They should offer you a free or low cost consultation and can at least help you understand what might happen here.

    Hang in there.

  • http://www.Credit.com/ Gerri Detweiler

    What do you mean your attorney is gone and you can’t talk with him? Do you mean temporarily? Do not pay this other attorney until you have talked to your attorney.

    If you file for bankruptcy then you generally are protected by the automatic stay. But you need to talk with your attorney asap to make sure that none of your property is at risk because of the judgment.

  • Teresa

    After answering the debt collectors interrogatories, we sent our own questions for them but they have not responded. It has been several months and they had 30 days to respond to the requested information. How do we move forward to get the case dismissed with prejudice?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      Teresa – Generally speaking, you would need to file a motion with the court. But you should run your legal issues by an experienced collection defense attorney in your state. You may be able to locate one who is familiar with your local courts, judges, collection attorneys and creditors at http://www.naca.net

    • Parrot Sarnoso

      You need to file a Motion to Compel, if they do not answer after the Motion to Compel, they are in Contempt with the Court. Then the Judge will decide, if punish them, fine them or vacate.

  • Bill Porter

    Jill I called the Courthouse today to find out about the letter I received. They said “oh disregard that, we received the paperwork about your bankruptcy.” I was very confused about everything because my attorney was gone and no one to speak to. Thank you for getting back to me. I am glad I called the courthouse. I was very mad at them because they said they were not responsible for letting me know about the new information. I guess its good I decided to call them. Life is tough.

    • http://www.Credit.com/ Gerri Detweiler

      Hang in there. It should be behind you soon.

  • Charles

    My wife recently received a summons and complaint from a debt collector. We reside in the state of Texas. Back in April of 2011 she was contact by Dillard’s and set up a settlement offer and payment arrangements of $910 for 3 months. Supposedly this would settle the debt. She made all 3 payments on time and without fail. Now a couple of years later a collector is suing her for the unpaid amount that was suppose to be written off. Here is my question….how should we respond to the summons. We have until Monday Feb 17th. Do you have a sample letter that we can use? Thank you so much.

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      Charles – Before looking for template responses to election lawsuits online, you may want to consider talking with an experienced debt defense attorney. Most offer a no cost initial consult where you can talk about your situation, get feedback, and your bearings on what to do next. There are some fantastic consumer law attorneys in Texas. You can locate some at http://www.naca.net

      You do want to file an answer in time, and simply denying you owe the debt would appear to suffice in your situation (you already resolved this). Did you get the settlement agreement in writing at the time? Can you still access the bank account records that will show those payments you made?

  • Parrot Sarnoso

    If you have some other debts, you can consider to file for Chapter 7.

  • nancy

    Hi Jill,
    I have answered the summon / complaint in the case of a credit card collector in a timely manner, representing myself on September 2012. filled out the forms and got waiver for the fee of $350 filed them all correctly and requested for ‘validation of debt ” Itemized on the form.
    after filling it, and submitting a copy to the court, I have not heard back from this collector who have hired a law office to represent them “Access Management” until Oct. 2013. they took the case to the different superior court in Santa Ana , and sent me
    ” case management” to appear at that court .
    I again mailed them and the court a “validation of the debt”.
    requesting the history of payment, and the date last payment was received etc. they just sent me a letter that they have originally sent to collect the debt a one page attached that just shows an account number and the name of a bank.!! there is again no evidence that this debt was transferred to them or no original agreement with my signature so None.
    how ever no one from plaintiff ‘s side had showed up at that date, our case was the first case at 9:00 am that was on 15th November 2013, judge then said we will give them another chance to show up in the court and the case was postponed by judge to Dec. 20th 2013, Later on I have received a copy of a letter addressed to the same judge from the Plaintiff that stated the attorney has missed the case with a 5 minutes difference by getting late to the court, and they request not to be sanction by judge… which was not true, we have started already 10 minutes after 9;00 because judge was not on time and no one showed up even 20 min. after, and I left the court about 9:25 .
    How ever at the second time December 20th 2013 , now Judge didn’t show up this time and he was busy with a conference call we were told, and now the case in postponed to June 11th by the secretary of the court!!

    but the Law office (plaintiff) paid $100 to a just graduated young attorney to represent them in court, the law office on this case are in northern California in Venture county. the young attorney has requested for a trial date. this young attorney as he tried very hard to talk to me outside the court, had no idea about the case, he did his best to get information out of me and find out if I have any money in pocket, he even offered me now to represent me in the court etc. and said if you have any questions call me and handed his bz card!!

    now I have to wait till June 11th for the court date trial in June 2014.

    this people apparently have no evidence of the debt, how ever they tried numerous time and took it to two different courts in the hope that I wouldn’t show up or not answer, and they win the case by default.
    a friend attorney advised me to send them the’”Request of Production” at the same time file it with court.
    I am not sure what I need to do to get rid of these blood suckers.

    I have petitioned a BK 13 back in 2008 as I was going through foreclosure, to stop the foreclosure. as an attorney charged me over $5000 to save my house, with no result and the house was foreclosed and all the credit cards were added to the BK beside few small cards with low limits. how ever the Bk was dismissed , due to the lack of income, no job to pay for the payments, etc.
    The account that this collection agency pursues was not even there with this large balance as they maintain. $17,000, it is not something that the Bk attorney could missed? he would have added this account to the BK.

    I don’t know where they get this account information, at some time I have transferred many cards balances to new cards with low interest. I am not sure if this one was one of those or not!!
    I was told now I need to do Discovery or “Request for production ” and if they come back with the same one page paper for evidence,
    I should go back to judge and request for dismissal of the case for lack of evidence or production.
    1) Please advise if this is the way to do it right, and what are the importance to put on that form to request for production.?
    I am frustrated and this case going almost 2 years now, I have no money to pay for attorneys or pay anything for the account that I am not even sure about. filling BK chapter 13 didn’t stop the foreclosure and my house was foreclosed in 2008. since then no credit card company has granted me any credit, so this account if existed must have been before that time which was till 2012 already over 4 years…
    2) I have also pulled my credit report in 2011 , there was no account with this information but now in 2012 -2013 this collection agency reporting late payment on the account, I have no agreement with them and didn’t pay a dime to them.
    3) they try hard by taking it to two different courts? can they do that and for how long?
    4) Are these arguments strong enough to present to judge or they may come with different tricks that I am not aware of.
    Thanks
    Respectfully
    Nancy

    • Chanti

      Please inform me with the recent update on your case. Thanks.

  • http://www.Credit.com/ Gerri Detweiler

    Is this collector threatening you with either of those actions? If so their threats are probably illegal. You generally can’t go to jail because you can’t afford to pay a debt, and a debt lawsuit is a civil matter not a criminal matter. However, you can suffer some consequences if they get a judgment against you (possibly wage garnishment or seizure of your bank accounts, depending on state law), and judgments last a very long time. For that reason, I would really encourage you to at least meet with a consumer bankruptcy attorney so you understand your rights and options here.

    Also read: Creditor Gets a Judgment Against You – Now What?

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Unfortunately, they do not have to accept the settlement, or payment in the amount of the two bills you agree with.

    You can increase your offer if you can pool together other cash resources that quickly, but at this late stage, I would encourage you to go to the court date regardless. You may find you are able to set up some type of affordable payment while there, or learn of other options and exemptions.

    Have you sought advice from a low income legal aid office? You may want to place a call to one and see if they can suggest anything to you at this late stage, and perhaps even get some support.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Jan – It is not too late to consolidate your bills if you are referring to something like a debt management program. But just like original creditors, not all debt collectors will be interested in having you on the plan.

    If you want to post the names of the collectors you are currently hearing from, I can comment about that. There is also good opportunities to settle debts for lower payoffs at this late stage of delinquency.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    There are consumer law attorneys that specialize in auto deals gone bad. I would encourage you to locate one nearer you and talk about how all of this went down. You can search for one at http://www.naca.net.

    You may not be able to afford to retain an attorney (though consumer law attorneys can be more affordable than people think). You can also look for help from a low income legal aid office nearby. Many will have experience with auto lending and warranty laws. And it sounds like you may qualify for lower cost assistance.

  • http://www.Credit.com/ Gerri Detweiler

    Adam – My understanding is that they would need to document that you owe the debt. It’s not up to you to prove that basic fact. However, when they take you to court they will have lawyers who know the court procedures and you will be at a severe disadvantage. would encourage you to talk with a consumer law attorney. They may be willing to help you at low or even no cost if the collector is breaking the law. You may even be entitled to damages. Visit naca.net to find one in your area.

  • Tanya

    Pay your bill. You incurred it. Just bc it is old doesn’t mean you don’t owe it. Where are your morals? Do you even have any that you are intentionally hiding from a co that helped you when you needed it? God forbid you ever need help again. I hope you get turned down for any credit for years to come and then you will learn.

    • Sunday

      Tanya get a grip on reality..who are you to judge anyone . Sometimes people get into situations that they cant help right away. Just because she didnt pay doesnt mean she did it to be immoral! ! Maybe she couldn’t ..do you know her or the situation. Get a life

    • Cossi

      Tanya,, the law have no morals

  • http://www.Credit.com/ Gerri Detweiler

    Your best bet is to talk with a consumer law attorney with experience in debt collection and lemon law. They may have some advice for you to help you understand your options. Visit NACA.net to find one in your area. The first consultation will likely be free. If you discover you can’t afford their advice, ask if they can refer you to legal aid in your area. I hope you can figure something out so you can put this behind you before you leave.

  • http://www.Credit.com/ Gerri Detweiler

    You need to talk with your own attorney right away. First place I would start is with your divorce attorney of course. I suspect, though, that you also need to consult with a consumer bankruptcy attorney. They should be able to help you with both the judgment and the creditors that are coming after you. You can search for one in your area here: NACBA

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    It would be a good idea to talk your situation over with an experienced consumer law attorney. One who specializes in defending against collections in the court. This type of attorney could already have experience dealing with QuickClick, or the attorney they have hired to collect from you. Try to locate an attorney near you at http://www.naca.net

  • http://www.Credit.com/ Gerri Detweiler

    It sounds like you are being sued for a debt. I would recommend you contact a consumer law attorney. If you can’t afford one, you can try legal aid. Gulf Coast Legal Services is a good organization – I know they cover Bradenton, not sure if they can help you in Gainesville but it is worth a try.

  • http://www.Credit.com/ Gerri Detweiler

    Yes it may be possible depending on the facts and circumstances in your situation, but the procedure varies by state. Two ways to find out: talk with a bankruptcy attorney who should be able to explain your options or try researching it yourself. If you decide on the latter, start with your state attorney general’s consumer protection office. You can also try contacting the court. Some publish consumer information.

  • http://www.Credit.com/ Gerri Detweiler

    It sounds like you are doing your homework and doing everything you can. They may not show up in court, and if not, hopefully your preparations will pay off. As much as I’d like to give you further advice, I am not an attorney and am not familiar with how these kinds of matters proceed in your local area. If you can let us know how this turns out, though, I am sure other readers will be interested!

    • Aj721

      Gerri,
      They never showed!!! Dismissed with prejudice. I did not have to say a word, except my name and that I was the defendant. THANKS!!! I followed your advise and prevailed!!!! I was back in my car by 9:30 am!!!

      I was the 7th case out of 13. Those before me did not show and got judgements by default. PEOPLE – follow Gerri’s advise – file and answer and show up!!

  • http://www.Credit.com/ Gerri Detweiler

    Since you have proof this is an easy one. They have to honor this request and if they broke the law you may be entitled to statutory damages, attorneys fees, and possibly even punitive damages. Contact a consumer law attorney who no doubt will be happy to help at no cost to you (since the collector pays the attorneys fees if you win). Visit Naca.net for a referral.

  • http://www.Credit.com/ Gerri Detweiler

    I don’t know. Was their case dismissed with prejudice or without prejudice? If the former then it’s my understanding they can’t bring the same case again. But I am not an attorney so I’ll have to suggest you talk with one in your area. Visit NACA.net for a referral.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Renee – You should discuss this with your own attorney, but I would expect that the only one that would be inconvenienced by your move, as it relates to the collection lawsuit, would be you.

    I am not aware of any requirement for a suit like this to get moved to another state for your convenience. You would need to travel back to Ohio for trial, and any required appearances leading up to that.

    Have you consulted with an experienced debt defense attorney? It would be a good idea at this point if you haven’t.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Jeff – You appear to have legally discharged the debt in bankruptcy, but that would not have let her off the hook for the debt as a cosigner. She paid, or could have been sued. If the divorce agreement was that you were to pay this, but did not, they may be able to force the issue. You should talk with your lawyer about this. If you are not going to talk to your divorce lawyer, talk to a different one and get their advice.

    • Jeff

      Thanks Michael, I was only able to get a hold of my bankruptcy lawyer but said about what you said. Best I can hope for is not going to court, not paying legal fees, or penalties to lender. Should I demand any taxable write-off she might have claimed to be subtracted from what I possible owe? It was a loan used for educational job training.

      • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

        I cannot see how her tax treatment on this issue would relate to your finances, but talk with your tax pro about this to get the advice you need.

  • http://www.Credit.com/ Gerri Detweiler

    Greta – Unfortunately by making those two payments you may have revived the statute of limitations which may have given this collector longer to sue you. While I know you don’t want to file for bankruptcy, you really do need to get legal advice here. What happens if they successfully sue you and get a judgment for $19,000? Do you know how they can collect from you? (It may include garnishing wages, going after your assets etc. depending on state law.)

    I’d really encourage you to at least talk with an attorney who handles bankruptcy and debt collection defense. It may be that you have a defense against this lawsuit since it changed hands so many time. But you are going to be up against counsel and trying to represent yourself will be difficult at best.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    I would recommend you contact an experienced consumer law attorney with a practice that focuses on helping people with collection issues in the courts. Try looking for one that is a member with http://www.naca.net (use the find attorney feature on the site). You may also want to try contacting a low income legal aid office nearest you. If you qualify for low to no cost help, they would be a great resource. If not, they may be able to refer you somewhere.

    The reason for what you described to occur, is often due to failure to follow through with something compelled by the court, like not showing up for an asset discovery hearing.

  • http://www.Credit.com/ Gerri Detweiler

    Candy – It is natural to be panicked when you receive notice of a lawsuit. But take a deep breath and please provide us with some more information to help us point you in the right direction.

    What kind of provider was this? Hospital, doctor, lab?
    When did your husband get this medical treatment?
    Was this a participating provider in his insurance network?
    What happened after he saw the provider – did he get bills? An Explanation of Benefits from his insurance? Anything else?
    Do you know why it went unpaid? Did you have any conversations with your insurance or the provider?
    Were you contacted by a collection agency previously? If so, what happened?
    You say the company has shut down – what company?
    How much are they suing you for?
    If need be would you be able to settle or pay this bill?
    I need to better understand the situation.

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    It is possible that you could be sued. What is the name of the debt collection company contacting you?

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    They would need to sue you first, get a judgment, and only then would they be afforded extra ordinary collection options. At that point, the social security cannot be attached at the source, and I doubt the annuity would be attachable (talk with an experienced consumer law attorney about this).

  • http://www.Credit.com/ Gerri Detweiler

    An attorney who regularly collects the debt is considered a debt collector for purposes of the Fair Debt Collection Practices Act. Calling you a liar and refusing to verify the debt etc sounds they may not be following that law. You need to consult a consumer law attorney of your own. You may have a case under the FDCPA and if you do you they may have to pay your attorney’s fees as well as damages. Visit NACA.net to find one in your area. Let us know what happens.

  • http://www.Credit.com/ Gerri Detweiler

    Unfortunately the fact that you can’t afford to pay is not a defense against a debt collection lawsuit. As I mentioned in the article, you must have a valid reason for fighting the lawsuit. And this is something that is generally difficult for the average person to navigate on their own without legal training. (It’s not impossible but difficult.)

    Have you tried reaching out to your local legal aid office. Some of them are quite good and may be able to assist you. Another option is for you to consult a consumer bankruptcy attorney. It may turn out that bankruptcy is your best option here.

    Finally, even if they get a judgment against you in court that doesn’t mean they will be able to collect. This article may help: Creditor Gets a Judgment Against You – Now What?

  • Rain

    today my uncle received an estafa-case notice or something like that from a company that lends money. they gave him 5 days to pay all his balances including the interests and it has reached over 60,000. the letter says that if he can’t pay the exact amount before the time limit that they gave, they would really sue . PLS,GIVE US SOME ADVICE

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      What is the name of the company? What state is your uncle in?

  • http://www.Credit.com/ Gerri Detweiler

    Why isn’t your bankruptcy attorney advising you on this? It would be very improper for us to do so when you are in the midst of a legal proceeding.

  • jenni

    In the section “make them prove what they owe”, it states “We always demand to see the original signed agreement and a balance on the account from zero to the present,” Is that something i put in my answer, file a motion, ask the judge during the trial? Thanks

    • http://www.Credit.com/ Gerri Detweiler

      Jenni – The procedure for responding to a debt collection lawsuit varies by state. The plaintiff (the creditor or collection agency) will have legal counsel and you will be at a disadvantage if you try to handle this yourself. I’d recommend you at least talk with a consumer law attorney.

  • http://www.Credit.com/ Gerri Detweiler

    Alisha – Since you are being sued for this debt I strongly recommend you talk with a consumer law attorney to find out what your options are.

  • http://www.Credit.com/ Gerri Detweiler

    Karen – I am not sure I understand. Did they take the payment out earlier than they were supposed to? Do you have any record of your agreement with them? Have you tried contacting the provider who took out the payment early?

  • http://www.Credit.com/ Gerri Detweiler

    Regardless of whether that is standard practice or not the real issue now is what can you do about it? You need to find out whether the statute of limitations has expired (are they filing suit too late?) If so then they may be breaking the law. If not, then you need to understand your options for either fighting the lawsuit or resolving the debt. I suggest you talk with a consumer law attorney.

  • http://www.Credit.com/ Gerri Detweiler

    Thanks for sharing this.

  • http://www.Credit.com/ Gerri Detweiler

    I would suggest you talk with a consumer law attorney in your area to find out if the amount of interest they are charging you is legal. (Visit NACA.net for a referral.) If it is, and there is no way you can resolve this debt you may need to talk with a consumer bankruptcy attorney.

  • Allison

    I was served with a summons and complaint and was advised to respond, which I did but I didn’t list any of the above defenses. They neglected to respond but asked the court waive the dismissal without prejudice a set the matter for trial. So, I have to go to court in August.

    My question is what do I do next. I know to ask them for standing and chain of custody but how do I do that correctly? Do I send the plaintiff a letter? Do i wait until the court date and ask them in front of the judge? This is discovery, right?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      Who is suing you (name of plaintiff)?

  • christine alpert

    my aunt paid credit card insurance and when she got fired i called the credit card to let them know cuz she doesn’t speak english they said it would be taken care of. 2 years later she get a summons from the midland funding to go to court what does she do

    • http://www.Credit.com/ Gerri Detweiler

      Christine – Unfortunately your aunt is going to need legal advice since she is being sued.She will need to talk to a consumer law attorney. She may have a defense to the lawsuit as I mentioned in the article, but you’ll need an attorney to evaluate the facts and circumstances. If she can’t afford one, I’d suggest she find out if she qualifies for legal aid. Does she live in Texas by chance?

  • http://www.coralseamercantile.com.au Coral Mercintile

    great and useful article about dealing with debt collection companies.Thanks

  • http://www.Credit.com/ Gerri Detweiler

    It is not at all uncommon for debt collection lawsuits to contain errors. In fact,. one judge was quoted in a national news story stating that most of these suits are erroneous but because consumers don’t defend themselves they get a default judgment. I don’t know what the track record is for this lender nor do I know what kinds of defenses you may have. The outcome may also depend on where your case is filed.

    Just showing up is not a defense against a lawsuit. You either need to have an attorney present or at least get some input on possible defenses you can raise yourself. If you can’t afford an attorney you may want to see whether you are eligible for legal aid: LawHelp.org. I truly hope you can find a solution.

    (And I understand completely what you’re saying: if you had the money to pay it you wouldn’t be in this situation!)

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Steven – You should be speaking with an debt defense attorney about your next steps. Try to locate some one nearest you with the experience needed through http://www.naca.net.

  • http://www.Credit.com/ Gerri Detweiler

    What state do you live in? If you live in a community property state then any debt incurred by either of you after your marriage may be both of your responsibility. If you don’t, then it sounds like the lender has mistakenly identified you as a joint accountholder and not an authorized user. (Whether your husband agreed to pay it or not would irrelevant if you were a joint accountholder – but it sounds like you were not.)

    Get your
    free annual credit reports to see how it is listed. Also monitor your credit scores for free throughout this process. Finally, you may need to either talk with a consumer law attorney or complain to the Consumer Financial Protection Bureau.

    • lbuggz

      I live in Florida

  • anita jones

    Wisconsin…I have a creditor that took me to court and the case was dismissed. Now they are threating to take me back to court. can they do that?

    • http://www.Credit.com/ Gerri Detweiler

      Was it dismissed with prejudice or without prejudice? If the latter then they may be able to try again. (Please keep in mind we are not attorneys and can’t offer legal advice.)

  • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

    Probably, but talk with an experienced debt collection defense attorney in your state about the angle in your comment, and other potential options for managing the situation.

    Check out http://www.naca.net when trying to locate an attorney with the experience you need, who will also typically offer a no cost initial consult.

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