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One Powerful Tip if You’re Sued for a Past Due Debt

You owe a debt to a credit card company. You fall behind, and the credit card company sells the debt to some other company.

Happens all the time, don’t look so shocked.

The company buys the debt for something on the order of 25% of the outstanding debt. In exchange for the right to collect, they get a computer file with your name and other information.

What the debt buyer does not get is a copy of the application, old statements, or charge slips. In other words, no proof that is admissible in a court of law.

Debt Buyers File Thousands Of Lawsuits

Debt buyers are in business to collect overdue bills, and they pay millions of dollars each year for the ability to do so.

When people don’t pay voluntarily, the debt buyer sues. And because there are a lot of accounts out there, the big players file lots of lawsuits.

In fact, last week I was in Chatsworth (which is where the Los Angeles collection lawsuits are heard) I stood next to a process server who was filing a stack of lawsuits about 12 inches high. Conservatively, that’s about 250 collection lawsuits.

For a single day. And a single debt buyer.

Remember, They Don’t Have The Goods

It doesn’t take much for someone to sue you for money – just a check for a filing fee an a few pieces of paper. Legally you’ve got to have a good faith belief in your ability to win the case, but there’s nothing saying that you’ve got to have lock solid proof in order to walk into court.

That’s the problem – the debt buyers don’t have proof.

They have no proof of the amount due.

They have no proof of whether the numbers are correct.

They have no proof that the debt they bought is yours.

They have no proof. Period.

Don’t Let Them Roll Over You

If you’re sued for a debt, you need to show up – just like Woody says.

Get a lawyer, or do it on your own. File an Answer, and do it on time. Make the debt buyer prove the case.

But don’t ignore the lawsuit. Because if you do, there’s a 100% chance that you will lose.

Image credit:  Luiz Fernando / Sonia Maria

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By |April 30th, 2013|

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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