Debt Collection Harassment and Defense

Defending Debt Collection Complaints and Stopping Harassment

Most people who are sued by a creditor or debt collector don’t respond. That’s a mistake. Court rules require defendants to file an “answer” or other response to a complaint within 20 days. Failure to do so will result in a default judgment against the person who was sued.

If you get served with a complaint and fail to respond, the “person” who sued you (by “person”, I mean the creditor, collection agency, debt buyer, business or individual who filed the complaint) will try to satisfy the default judgment. That could include garnishing your wages, repossessing your car, seizing a bank account or other property, or placing a lien on your home. Default judgments can be vacated for good cause. But it’s much better to avoid having one entered in the first place.

It’s fair to ask why you should fight a lawsuit if you owe the debt you’re being sued for. The answer is simple – you may not owe the debt and you may be able to successfully defend the lawsuit even if you do.

If you’ve been served with a debt collection complaint, there’s a good chance I can help. Here are some reasons why:

• Just retaining an attorney may convince the person suing you to dismiss or stop pursuing their complaint.

• Debt collectors count on getting default judgments against people who don’t respond to complaints. That happens in the vast majority of cases – well in excess of 90%.
• Retaining an attorney sends a clear message to the person suing you that they’ll have to spend time, effort and money to win their case in court. This is particularly true if they bought the debt from the original creditor (called “debt buyers”). Debt buyers often lack the documents needed to prove you owe the debt and that they have the right to collect it (see below). They don’t want to pay legal fees and get nothing in return, so they may just walk away or dismiss their complaint if you hire an attorney and respond



• You may not owe the debt.

• Don’t assume you owe a debt simply because you’ve been sued. Many debt collection complaints are filed by debt buyers that buy defaulted credit cards or other debts in bulk from the original creditors or even another debt buyer. Debt buyers generally get incomplete and frequently incorrect information from creditors, such as a wrong name or Social Security number for the debtor. This may cause them to sue the wrong person.
• You might be sued for a debt you don’t owe. For example, you could be sued for a debt owed by a spouse, partner or family member. This can and does happen, particularly with credit cards. Credit card companies may incorrectly – and sometimes intentionally – sue a husband, wife or partner who isn’t responsible for paying the credit card. Why? To pressure that person into paying the debt so they avoid damaging their credit rating.
• The FTC is cracking down on what it calls “phantom debt collectors” who “try to pressure people into paying debts they don’t really owe.” You can read about it here: (insert link) https://www.consumer.ftc.gov/blog/2017/06/company-kept-collecting-debts-it-knew-were-phony
• Credit card companies, retailers and other businesses that send payment information to consumer reporting agencies (called “furnishers”) sometimes make mistakes. Furnishers may report an account as delinquent when it’s not, or report an account under the wrong name. Consumer reporting agencies make similar mistakes. The end result – our credit reports contain incorrect or incomplete information that can lead to a lawsuit.
• Debt collection complaints can result from identity theft. Stolen credit card numbers and personal information (names, dates of birth, Social Security numbers, drivers’ license numbers, etc.) are sold on the dark web. Bad actors buy stolen information and use it apply for credit cards, open utility accounts or take out insurance in the victim’s name. When the bogus credit card or account isn’t paid, the creditor may mistakenly sue the person whose identity was stolen.

• Even if you owe the debt, the person suing you may not be able to prove it.

• This may be hard to believe. But it’s happens all the time, particularly if the person suing you is a debt buyer and not the original creditor. Here’s why:
• Delinquent credit card debts and defaulted loans are routinely sold by the thousands for pennies on the dollar by the original creditors – often large national banks. Debt buyers often receive nothing more than a spreadsheet with limited information on the card holders. They seldom receive documentation, like the original credit card agreement or monthly statements, and may not able obtain it when needed to prove their case.
• Debt buyers hire law firms to file complaints against individual debtors. Neither they nor their lawyers verify whether the purchased debt is actually owed, beyond checking the debt buyer’s spreadsheet. Collection lawyers work quickly and put little effort into drafting individualized complaints. This can and does result in complaints being filed against people for debts they don’t owe.
• When you respond to a complaint, the person who sued you (the plaintiff) has to prove they own the debt. If they can’t, they have no right to collect the debt and their complaint should be dismissed. When debts are sold and resold, the person suing you must prove each transfer of ownership. This requires calling multiple witnesses to testify in court who are probably located in other states. The plaintiff also has to document the transfers with statements, contracts and other paperwork that either doesn’t exist, can’t be obtained or can be obtained only at substantial cost.
• Even if witnesses and documents are available, the legal costs for the person suing you may be prohibitively expensive in relation to the amount owed. When this happens, there’s a good chance the complaint will be dismissed.

• You may owe less than the amount you’re being sued for.

• Debt collectors may claim you owe more than you do. This can result from billing errors. Or the debt collector may add interest, late fees and legal fees without having the legal right to do so. This happens frequently. Illegally adding interest and fees to the amount of the debt can be the basis for a counterclaim.

• You may be able to reach an agreement with the person suing you and settle the case for a fraction of what you owe.

• Depending on your financial circumstances, you may be able to settle the case for pennies on the dollar. In return, the person suing you would dismiss their complaint. You may also be able to work out an affordable payment plan.

• You may have valid defenses to a debt collection lawsuit.

• Even if you owe a debt, it may be “time-barred” and therefore uncollectible. Some debt buyers purchase older debts because they’re cheaper to buy. Sometimes these debts have been sold multiple times. Debt collection lawsuits have to be filed within a certain period of time after the debt went into default, called the “statute of limitations.” If someone files a complaint against you after the statute of limitations has run out, the court is required to dismiss the complaint. But you have to file an answer or other responsive pleading to raise a statute of limitations defense. The court won’t know the debt is time-barred unless you assert the statute of limitations as a defense.
• The complaint against you may also be legally deficient or fail to comply with procedural requirements. If so, you may be able to file a motion to dismiss the complaint. But that involves recognizing and raising legal issues. It’s not something you should try do yourself.

• You may be able to file a counterclaim seeking money damages against the person who sued you.

Counterclaims to debt collection lawsuits are usually based on unlawful debt collection practices that occur before the complaint is filed in court. Federal and state debt collection and consumer protection laws protect consumers by prohibiting creditors and debt collectors from engaging in certain types of conduct, like using profane or abusive language, making phone calls before 8 am or after 9 pm, calling your friends and family members, calling you at work if you asked them not to and threatening legal action they have no right to take.

• Counterclaims can be used defensively to offset any money you do owe or to pressure the plaintiff into dismissing its complaint.
• Counterclaims may also be used offensively. If you have a legitimate counterclaim and can prove it, a court may order the person suing you to pay you substantial money damages, as well as reimburse you for your legal fees and expenses.

You can avoid anxiety, embarrassment and mental distress.

• If you successfully defend a collection lawsuit, you won’t have to worry about being sued in the future for the same debt.
• Hiring a lawyer will end debt collection calls. Federal and state laws prohibit debt collectors from calling anyone who is represented by a lawyer. Doing so is an unfair or deceptive practice.

Getting a judgment in your favor or the dismissal of a complaint should help improve your credit rating.

• If you can get a debt collection complaint against dismissed, or get a judgment in your favor in court, then you no longer owe the debt. At that point, you should be able to get the debt removed from your consumer credit report or have your report corrected to show that the balance is now zero.