What should I do when I’m being sued by a credit card company or debt scavenger?
Credit card companies and debt scavengers are usually the most aggressive when attempting to collect on a debt. Major banks and reputable credit card companies are careful with who they sue and when, as any mistake can damage their brand. Debt scavengers, though, aren’t burdened by such scruples, and will use lawsuits (and the threats of a lawsuit) as an intimidating tactic.
Debt scavengers are companies that buy high risk debt from other creditors, usually for pennies on the dollar. They hope to make some of those account holders pay up, so they go for broke when pursuing outstanding debt. Scavengers, unlike banks and credit card companies, are only as profitable as they are successful in intimidating people into paying. They aren’t afraid to play dirty, then. This is true even when they have no legal ground to stand on, so defendants should always be ready and willing to fight back against credit card debt and debt scavengers.
Don’t Ignore the Lawsuit
When someone is sued by a debt scavenger, they often have no idea who the debt scavenger is. It’s usually a name they’ve never seen before, and defendants may not realize that their credit card debt has been passed off to someone else. This is a common problem regarding credit card lawsuits, too, as the credit card company may outsource the collections process to someone the defendant is unaware of.
In both cases, such a lawsuit may feel like a scam. And if it doesn’t feel like a scam, then there will likely be some panic. Lawsuits are seen by many as a fatal blow, but they shouldn’t be. Yes, a lawsuit has the potential to do lasting harm if it is not managed properly, but by mounting a proper defense, the defendant can usually maneuver into a more favorable position.
Every strong debt defense starts with answering the complaint, which is the first official indication that a lawsuit has been filed. Push aside the fear, anxiety and skepticism, and answer the complaint. Normally, the window to respond to the complaint is a few weeks, and it should be a top priority. Failing to respond to the complaint will earn the credit company or debt scavenger a default judgement in their favor. With that judgment, the collector has additional options in pursuing the debt, including wage garnishment. Fortunately, an answer is easy to provide and takes little time to manage, especially when handled by an experienced debt defense attorney.
Defending Against a Lawsuit from a Credit Card Company or Debt Scavenger
Once the answer is provided, the real work begins, and fortunately, there are several angles of attack when defending a credit card or debt scavenger lawsuit. For example, a debt defense attorney will consider these options:
- Force them to prove the debt – Financial institutions like powerful banks and credit card companies usually do a good job of maintaining the important details associated with every account. As such, they can back most lawsuits with all critical information.
However, this is not always the case with debt scavengers, and some credit card companies have issues with it too. The problem arises when the debt is sold off to the scavenger. Because debt scavengers buy huge numbers of accounts at a time, they rarely get all the information they need for every account. In some cases, they may only get a name, contact information and an amount owed. However, this is far from enough information for the court, so debt scavengers frequently do not have the authority to sue, but that won’t stop them from trying.
Debt defense attorneys know exactly where scavengers are usually lacking in the documentation they can provide, and the attorney will hammer them on this point.
- Invoke the Fair Debt Collection Practices Act – The FDCPA is in place to protect consumers from fraudulent or deceptive attempts to collect a debt, and also ensure that collectors do not overstep reasonable boundaries in contacting the debtor. The FDCPA comes with an exhaustive code of conduct that collectors must follow. They include set hours for phone communication, a requirement to cease contact upon request, not using phone calls in an annoying or harassing manner, misrepresenting the debt, publishing the debtor’s information anywhere, or using threatening or abusive language when communicating through any means.
Collectors are also required to notify the consumer of their rights, provide identification upfront, and provide verification of the debt. This last one is something that debt scavengers will usually attempt to duck, and when they do, it’s often a sign that they are in a weak position.
FDCPA violations won’t always get a lawsuit thrown out, but they can weaken the collector’s case in the eyes of the court.
- Check statute of limitations – Credit card companies and debt scavengers know that the overwhelming majority (likely in excess of 90 percent) of people do not answer the complaint. These companies rely on that fact, hoping to win a default judgment even when they have little legal standing to back up the lawsuit and collect the credit card debt.
The statute of limitations is something that debt scavengers will often abuse when hunting for a default judgment. Every debt comes with a finite number of years within which it can be the subject of a lawsuit. This is normally two or three years, but the period can be longer, in some states. The period normally starts when the last payment is made, and once it passes out of the statute of limitations, it can no longer be the subject of a lawsuit.
But again, debt scavengers and some credit card companies don’t care. They know if the debtor doesn’t show up, then it doesn’t matter how old the debt is. This is why merely responding to the lawsuit is so important, and a debt defense attorney can ascertain whether the statute of limitations is in play.
There are other approaches a debt defense attorney can take, and they can represent their client during settlement negotiations if it’s found that the debt is valid. In short, there are always options, and a debt defense attorney will ensure their client has access to all of them.