How To Win a Debt Lawsuit Against a Debt Collector

The most common reason people lose debt collection lawsuits? They simply don’t show up. Default judgments happen when you don’t file an answer to the complaint. They also happen when you don’t appear in court. Many of these cases could have been won with proper response.

If you’re sued by a creditor, debt collector, or debt buyer, take action immediately. Ignoring the lawsuit guarantees you’ll lose. Our partner Solo can help you respond to debt lawsuits and fight back effectively.

Filing an Answer

A debt collection lawsuit starts when a creditor files a complaint with the court. You’ll find out about the lawsuit when you’re served with a summons. The summons includes a copy of the complaint. That’s your cue to take action immediately.

Time is limited. Your summons tells you how long you have to file an answer. The rules differ from state to state. Read your summons carefully.

When an Answer Is Required

In most states, you don’t need to file an answer in small claims court. Instead, you’re automatically granted a court appearance date. Even without filing an answer, you may need to file a written appearance. The deadline for this appearance is usually specific.

Read the documents you receive carefully. Comply with all requirements. Missing a deadline can cost you the case.

What Happens if You Don’t File An Answer

If an answer is required but you don’t file one, trouble follows. The creditor can ask the court for a default judgment. Since you didn’t dispute anything in the complaint, the judge assumes everything is true. The judgment is entered against you automatically.

Once a judgment is entered, the creditor can:

• Order you to appear in court to disclose your income and assets
• Garnish your wages through your employer
• Seize funds in your bank account
• Put a lien on your property

The judgment appears on your credit report. Your credit score takes a hit. A default judgment damages your finances for years.

You can avoid all of this by filing an answer on time. You don’t need a lawyer to take action. Our partner Solo helps you draft and file debt lawsuit responses. They’ve helped over 230,000 people and offer a money-back guarantee.

How To File An Answer

The complaint you receive contains the creditor’s claims. These claims are typically numbered. In your answer, you admit or deny each claim.

Some claims include basic information that’s accurate. For instance, one claim includes your name and address. If that information is correct in paragraph 3, write “Numbered paragraph 3 is admitted.”

Other claims may not be true. Paragraph 7 says you took out a loan from ABC Bank in November 2019. But you’ve never heard of ABC Bank. You would deny numbered paragraph 7.

You may also deny claims because the details seem incorrect. A debt buyer sues you for $7,684.38 on a credit card. But your last statement showed $4,520. You would deny that claim because the amount doesn’t match your records.

You must respond to each numbered claim. Sometimes you don’t have enough information to admit or deny. A debt buyer claims they received the account on a specific date. You don’t know whether that transaction actually happened.

In this situation, write that you don’t have the information necessary. Don’t admit something you don’t know to be true. Admitting without knowledge prevents you from raising the issue later.

Your answer should include any defenses you have to the claim. Add any counterclaims you have against the debt collector. These are discussed in the next section.

When you’re done writing your answer, review it carefully. Sign your answer and file it with the court clerk’s office. File within the time frame shown on your summons.

How To Serve A Copy On The Plaintiff

The plaintiff must receive a copy of anything you file. When you file your answer, bring two extra copies. Ask the clerk to file stamp them. Keep one for yourself and send the other to the plaintiff.

Send the plaintiff’s copy by certified mail right away. If an attorney filed the complaint, send it to the attorney’s address. You’ll find the address on the complaint.

Defenses

Most people who skip answering a debt collection complaint miss an important opportunity. Many debt collection cases can be won. Cases are won when the plaintiff lacks necessary evidence. They’re also won when the defendant raises successful defenses.

The Plaintiff Has The Burden Of Proof

The burden of proof is your most powerful tool in debt collection cases. In every state, the plaintiff must prove each claim in the complaint. In civil court, the standard of proof is “preponderance of the evidence.”

The plaintiff must prove their claims are more likely true than not. If you don’t answer or show up, courts take the debt collector at their word. When you file an answer and show up, you force them to prove their case.

The debt collector must prove:

• They have the right to collect on the debt
• The account is yours
• The debt hasn’t been paid
• The exact amount remaining due
• Your contract provides for any fees, collection costs, or interest added

Debt collectors often don’t bring necessary documentation to court. They’re used to defendants not showing up. When the plaintiff is a debt buyer, they might not even have access to those records.

Even if the debt collector presents evidence, you can question it. You might have records proving payments they didn’t include. That calls the reliability of their entire record into question.

You can often win before raising any defenses. If the plaintiff can’t prove its case, there’s nothing to defend against.

Identity Theft Or Mistaken Identity

The plaintiff must prove you opened the account. Courts typically accept a copy of an application or contract as evidence. Defendants rarely fight back on this point.

If you’ve been a victim of identity theft, bring your evidence to court. If you know your credit report was mixed with someone else’s, present that information. If the account isn’t yours, the case can’t move forward.

Affirmative Defenses

Affirmative defenses work even if you actually owe the money. Common defenses include:

The case was filed outside the statute of limitations.

Every state puts a time limit on filing debt collection cases. Depending on state law, the statute of limitations ranges from three to 10 years or more. If the case is filed too late, it can be dismissed.

The plaintiff doesn’t have the right to sue.

If the plaintiff is a third party like a debt buyer, they must prove they have legal standing. Without paperwork proving the debt was transferred to them, the judge may dismiss the case.

Even if the case is dismissed, the plaintiff may sue again later. They might find the necessary evidence. A dismissed case is a good time to offer a reduced settlement. Settling saves the debt collector time, court costs, and uncertainty.

The debt was discharged in bankruptcy.

Ideally, the debt was listed in your bankruptcy schedules. You can show the court the debt was discharged. But listing isn’t always necessary.

If you got a discharge in Chapter 7 and owed the debt when you filed, you’re probably covered. If there were no assets to distribute to creditors, the debt was likely discharged. If there were assets for partial payment, the debt probably wasn’t discharged unless listed. The same applies to Chapter 13 bankruptcy cases.

FDCPA Countersuit

Counterclaims include any legal claim you have against the plaintiff. The claim must arise from the same circumstances. Some of the most powerful counterclaims involve violations of the Fair Debt Collection Practices Act (FDCPA).

The law applies only to consumer debt. Generally, the FDCPA applies only to third-party collectors. Debt collection agencies and debt buyers fall under this law. Original creditors may be covered if they disguise their name to look like a collection agency.

Common FDCPA violations include:

• Calling repeatedly to harass you
• Continuing to call you at work after learning your employer doesn’t allow it
• Using obscene or abusive language
• Calling outside of reasonable hours
• Threatening actions they can’t actually take
• Pretending to be an attorney, law enforcement, or government representative

The FDCPA provides for money damages and attorney’s fees. If the debt collector violated the FDCPA, they pay your lawyer. Debt collectors know this. An FDCPA claim gives you negotiating power.

When To Hire An Attorney

Working with an attorney is often helpful if:

• The amount of money at issue is large
• You need information from the creditor or debt buyer to win
• You have an FDCPA or other consumer-protection counterclaim

For straightforward cases, our partner Solo can help you respond to the lawsuit without expensive attorney fees.

What If You Lose?

If the creditor wins a judgment against you, it’s not the end. Pursuing collection through wage garnishment is time-consuming and expensive. The plaintiff may still settle with you for a lesser amount. They might accept monthly payments to avoid the collection process.

Even after a judgment, you have options. Negotiation is still possible. The creditor wants their money without spending more on collection efforts.