So you got served with a lawsuit from a debt collector. Don’t panic! You have options. Lots of people face debt lawsuits and come out just fine on the other side. The key is educating yourself on your rights and taking proactive steps to get the case dismissed. This comprehensive guide will walk you through the process and provide you with the tools to ultimately get the debt lawsuit against you dismissed. Let’s get started!
Responding to the Lawsuit
The first thing you need to do is respond to the lawsuit within the timeframe specified on the paperwork you received. This is usually 20-30 days. You don’t want to ignore the lawsuit and have a default judgment entered against you.
To respond, you’ll need to file an “Answer” to the lawsuit. This is a written document where you address each claim made and deny allegations you disagree with. Be sure to include any defenses you have – more on those later. Drafting the Answer can feel intimidating, but don’t worry! There are plenty of excellent resources available to help you construct a strong response.
Filing an Answer forces the debt collector to prove the validity of the debt and their legal right to collect on it. Many cases fall apart at this stage if the collector cannot adequately prove this. Don’t make it easy for them!
As you draft your Answer, think strategically about affirmative defenses you may be able to raise to put holes in their case. For example, does the statute of limitations apply here? Were you properly served the lawsuit documents? Digging into issues like these could get the lawsuit dismissed quickly.
Bottom line: take the lawsuit seriously and file a timely Answer to get the ball rolling in your favor.
Verifying the Debt
Before paying a dime or agreeing to anything, you should send the debt collector a written request to validate the debt. This “debt validation letter” calls their bluff and forces them to pony up proof that you actually owe the amount they claim.
Be specific in disputing any elements of the debt that seem inaccurate or that the collector lacks proper documentation for. Get them to explain ambiguous or confusing charges. Hold their feet to the fire under the Fair Debt Collection Practices Act (FDCPA) until they satisfy the burden of proof that the debt is legitimately yours.
Many collections lawsuits crumble once collectors are pressed to validate the specifics. If they cannot verify the debt sufficiently, then legally speaking it is invalid. Any ruling against you could be reversed if based on improperly validated debt. Don’t let them get away with being vague here – demand details!
Negotiating a Settlement
Once you’ve filed your Answer, the next step is attempting to negotiate a settlement. Many debt collectors are willing to settle for 30-50% less than the amount owed in order to guarantee some payment.
Be sure to get any settlement offers in writing before paying the collector a dime. An ideal settlement agreement will state the payment plan terms and that your payment settles the debt entirely. Debt collectors often settle with a “payment in full” arrangement to lure debtors into paying without actually dismissing the lawsuit. Don’t fall for it!
Insist on having the debt collector file a dismissal of the lawsuit within a reasonable timeframe after you’ve paid per the settlement agreement. Don’t settle blindly – protect yourself with a written agreement. You have leverage to craft a fair deal.
Alternatives to Litigation
Heading to court can be draining, so explore alternatives that could resolve the debt faster and less stressfully. Many creditors and debt collectors would prefer mediation, where you meet with a neutral third-party mediator to find middle ground. The mediator facilitates discussion rather than acting like a judge, making mediation less adversarial.
If your original debt agreement contained an arbitration clause, file a motion to compel arbitration which moves the dispute out of court and into a private arbitration proceeding. Arbitration typically favors the consumer, since it’s far less expensive for companies than going to trial. Many collectors drop lawsuits when an arbitration motion is filed!
Don’t rush to court – mediate or arbitrate first.
Statute of Limitations Defense
An excellent way to derail a collector’s lawsuit is asserting the statute of limitations (SOL). The SOL sets legal limits on how long a collector can wait before suing to collect on a debt. The clock starts when you make your last payment.
You’ll need to research the SOL for your specific state and debt type. In many states, it ranges from 3-6 years for credit card debt. If the SOL has expired before they filed suit, the debt is essentially null and void from a legal perspective. Any judgment against you for an out-of-statute debt should not stand up on appeal.
If the collector sued over time-barred debt, they likely violated the FDCPA. In your Answer, emphasize the expiration of the SOL as grounds for dismissal. Fight unenforceable debt tooth and nail!
Creditors and collectors must properly serve you with the required lawsuit documents per court procedural rules. If you were not properly served, challenge this in your Answer and request a dismissal. Process servers have been known to falsify service documents to get fake “proof” of delivery. Don’t let them get away with it!
Another procedural issue is debt that’s been sold or assigned multiple times. Collectors may lack proper standing to sue if they can’t clearly prove ownership of the specific debt in question. Dig into the paper trail and challenge dubious assignments. Procedural missteps can completely derail an otherwise solid case against you. Know your rights!
Getting the Case Dismissed
If verification requests are blowing holes in their case, file a motion to dismiss citing their failure to validate the debt under FDCPA. Judges frown upon companies bringing cases without concrete proof ready to present.
Argue for dismissal if the statute of limitations has expired. The judge may be compelled by your convincing SOL argument to dismiss rather than ruling improperly. Be confident, as the law is likely on your side.
If you reach a written settlement, the debt collector must hold up their end of the bargain and file for dismissal with prejudice. This dismissal bars them from refiling the same claim. Don’t let them off easy here – make sure your rights are protected.
Getting a debt lawsuit dismissed is very achievable when you take the right steps. Educate yourself on the law and processes. Craft persuasive arguments. Follow through to guarantee your rights are upheld. You’ve got this!