How to Defend Against a Debt-Collection Lawsuit
If you have received a notice that a debt collector filed a lawsuit against you in court, you may be wondering what to do. Often, people who are sued do not actually owe the debt because the account at issue was paid off already, or because someone has stolen his or her identity.
Other times, if it not the original creditor who filed the lawsuit, and it is instead a “debt buyer” (a company that buys defaulted accounts), the company may not have legally sufficient evidence that it owns the debt. The following is an overview of some of the most important things to be aware of when defending against a debt-collection lawsuit.
Most debt collectors win their cases by default, without ever having to go to court. How? Because the people who are sued do not respond to the initial notices that a lawsuit was filed. These notices are called the “summons” (which notifies the consumer that a lawsuit was filed) and a “complaint” (which notifies the consumer of the basis for the lawsuit).
In Massachusetts state court, a consumer has 20 days to file an answer to the complaint. Instead of filing an answer, however, most consumers simply ignore these notices. This allows debt collectors to win without having to prove anything to a judge or jury. It is only after the consumer answers the complaint that the court system starts moving.
Due to inaccurate portrayals of the legal system on TV and in the movies, many consumers think that soon after the lawsuit is filed, a trial will be scheduled. In reality, however, there are usually a number of court appearances for other reasons, such as scheduling the case, filing motions, and other issues that come up. The court will send out notices of all these events.
Sometimes the debt collector will schedule these events with the court and give the consumer notice. Debt collectors will often try to get a decision without a trial, called summary judgment. It is very important for consumers to attend all court hearings and to respond to the court’s notices, or the court may allow the debt collector to win by default.
Make the debt collector prove their case.
Debt collectors file lawsuits in bulk, and often do not have all the necessary information that they need to prove their cases. Consumers have the right to force debt collectors to prove their cases. For instance, can the debt collector produce all the credit card statements? If the debt is now claimed to be owned by a debt buyer, does the debt buyer have an assignment of the debt? If the consumer disputes making charges on the account, the debt collector may need to prove the identity of the person who made them, and show that the person was authorized.
Getting to court is just the first step – the debt collector then needs to prove that it should win. The way to do this is through the discovery process, during which the consumer is allowed to request documents and information from the debt collector (and the debt collector gets to request the same from the consumer).
Carefully review any documents the debt collector provides.
Just because the debt collector provides some documentation, it does not mean that the documentation is legally sufficient for it to win its case. For example, debt buyers often produce documents that they claim assigned the debt, but which do not even reference the account number. Other times, credit card companies will provide account statements that show advertisements for products that did not even exist. In one example, a credit card company provided a card statement with an advertisement for a product that did not even exist yet. In another example, the statements had a copyright date years in the future. These types of manufactured evidence case doubt on the credibility of the documents.
Be willing to go to trial.
Finally, when defending any lawsuit by a debt collector, consumers should be willing to go to trial. In most cases, the credit card companies and other creditors are not willing to pay to fly an employee across the country to testify against consumers at trial. They will often dismiss their cases on the eve of trial. Under our court system, if the party filing the lawsuit (the debt collector) cannot or will not produce a witness to testify about what happened.