What recourse do you have, if you're sued by a debt collector? At first instance, it might be overwhelming for you, but believe me, it would just another normal working day for the courts and that they'll have to repeat the same mundane task of presiding over such hearings. Basically, a lot of debt collection agencies file scores of lawsuits in any given day and interestingly, a whopping 99 percent of the defendants do not bother to honor the court's summons.
If you are lost with the thought of having to respond to the summons, then you can heed the tips discussed here to defend and win over your adversaries (referring to your debt collectors) with ease.
Ways to fight your debt lawsuit and win it
Here are some cost-effective ways to fend off debt collection lawsuit without inviting ire of the courts:
- Exploit the statute of limitations (SOL) - In a lot of states, there's a time limit of four to six years during which a creditor can sue you for defaulting on the loans. However, once that period is over, the statute of limitation is no longer applicable. Even in that case, they look forward to debtors like you who do not respond to court summons. In case, the statute of limitation on your debt has expired and that you've used the same as a tool to defend yourself in the court, then your debt collectors will lose.
Remember not to make any payment once the statute of limitation has expired, as doing so will restart the SOL all over again. It is best to consult a debt expert or an attorney before making any such payments.
- Take to counter attack - When your debt collectors has sued you, why not sue them back? Sometimes offence is the best self-defence. So, if you've witnessed and have valid proofs to support your claim, then you can file a counter lawsuit in the court claiming Fair Debt Collection Practices Act (FDCPA) violations by the collection agency. The moment you attach your lawsuit and that of your collection agency's as Exhibit A, then you have a fair chance to win the case and even be compensated handsomely with reimbursement for all the legal costs like attorney's fees, documentation charges, etc incurred by you during the entire episode.
Actually, per the FDCPA, debtors who are victims of collection harassment are entitled to statutory damages of $1000, along with compensation for various other punitive as well as economic damages, provided it was granted by the court. And the icing on the cake will be that the convicted debt collector will have to bear all the legal costs on your behalf.
- Oppose the lawsuit - You have every right to oppose and challenge the lawsuit brought against you by the plaintiff by counter challenging their authority to sue you in the court using their own name. For example, collection agencies purchase credit card debts for pennies on the dollar from the original creditors and then file lawsuits to collect the outstanding credit balances from the respective debtors. Here, the law requires the plaintiff to clear their stand on the issue and that they must prove their competency to collect the debt in concern from you, subsequently permitting them to request a judgement in their favor. The authority to sue a debtor is known as standing - something which the debtor, i.e., you should never fall back from challenging.
You may even petition the court to have the lawsuit quashed because your debt collector has failed to prove their standing over the case and that they lack the necessary documents to establish their claim over the right to collect a debt from you.
- Work with the experts - When you know that you're a greenhorn in matters related to law, then it is always a better idea to consult and if possible, then to work with the experts to avoid becoming a lame duck for the plaintiff and be inadequately represented in the court. Never hesitate to get in touch with an attorney, if at all in life you get sued by a debt collector over the non-payment of a loan. Its obvious to feel embarrassed, but then its something that thousands of others are taking advantage of and are protecting their financial life from getting ruined by the unscrupulous loan sharks as well as debt collectors.
Most of the times, attorneys who specialize in this type of cases, usually provide free preliminary consultations. And there are many who have reportedly worked for free for consumers, if they find them being wronged by the debt collectors.
The reason is that they look forward to collect their compensations from the plaintiffs. So, the next time, if you are being severely intimidated by a collection agency, then notify them that you are being represented by a lawyer now. Once you inform them, then your case may become a lot easier to manage and your lawyer can try to have the score settled out of court, rather than let them drag you to the court.