Defending Debt Collection Lawsuits

Defending Debt Collection Lawsuits

A collections lawsuit can go one of three ways. First, the alleged debtor can do nothing in which case a default will be entered followed quickly by a default judgment and all the fun that brings like garnishments and levies and the like. Second, the alleged debtor can try to defend themselves which typically leads to a judgment on the pleadings. Third, hire a lawyers who knows debt collection law.

Let’s address the elephant in the room. Most people don’t seek out lawyers because they believe lawyers are too expensive. My firm, for example, recognizes that debtors are debtors for a reason so our fees are affordable and we work out payment plans if necessary. Affordable lawyers are out there.

Obviously, it’s best to hire a lawyer to represent you and here is why. A lawyer, who knows and works in the debt industry knows most of the debt collection law firms prosecuting these cases. That helps when the best approach is to maximize leverage and settle. Leverage is maximized with counsel because the debt collection attorneys and their clients will now have to fully prosecute their case, which they don’t like to do. Also, a lawyer will know how to answer the lawsuit so there is no risk of a judgment on the pleadings which happens all the time when debtors try to defend themselves. A good lawyer will know how to propound discovery to determine if there is a viable defense. Which brings up another point…. Some of these debt collection cases can be won.

Although it’s not common, there are debt collection cases which can be won by defendant debtors. Most of the time these cases are brought by debt buyers (companies that buy debts from creditors). Occasionally, there are cases where the statute of limitations has expired which is an affirmative defense to the lawsuit. There are other defenses, but most of these defenses will only be recognized by an attorney.

My final point related to this issue has to do with the Federal Fair Debt Collections Practices Act (15 U.S.C. §1692 et seq. “FDCPA”). This law protect consumers from illegal debt collection practices. Some of these laws even apply to lawyers and elements of debt collections lawsuits themselves. Only an experienced lawyer who has practiced in the debt collection field will be able to recognize violations. These violations can be asserted in a cross-complaint. There is nothing better than turning the tables on debt collectors, debt buyers, and collection attorneys. But, this can only be done with counsel.

Here is the point, most debt collection lawsuits end in default. Sometimes that is because service is bad and the debtor has not been properly noticed. I believe this is not the majority. I believe the majority of lawsuits are ignored because debtors don’t know what to do and they feel they can’t afford counsel… so they give up and find their pay has been garnished or their bank account has been levied months or sometimes years later.

Do yourself a favor and call counsel… if you are in Tennessee call our office. There is help

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