What to Do When You’ve Been Sued by Your Credit Card Company
So you have been sued and are wondering what to do next. The first thing aside from having a lawyer review the Complaint is to carefully read everything yourself and determine how long you have to file an Answer at the Courthouse to avoid a default judgment. Once you’ve been served with a complaint, there is a tight time window in which to file a response. Most credit card lawsuits end in default judgment because people ignore the lawsuit or fail to file an Answer denying the debt. Many Answers written by consumers often consist of reasons for why they have been unable to pay and a request for a payment plan to be established by the Court. Unfortunately, the Court generally does not care if you have become sick or lost your job and need time to pay- the Court reads that as an admission of debt and often simply grants judgment for the Creditor.
The Credit Card Companies Expect to Win by Default, But May Not Be Entitled To, Ask Questions
Consumers need to understand that the debt usually must be denied to avoid losing by default. Laws vary by state, but often an Answer must be filed at the Courthouse in a little as 20 days, or perhaps less in your jurisdiction. Over 90% of credit card lawsuits end in default judgments for the creditor and that is how the collectors like it. Their business model is premised upon a quick judgment because they sometimes have little to no paperwork to prove their case at trial. A boilerplate two (2) page Complaint with no attachments may mean they have no real evidence of the debt. Critical questions to ask include:
- Who is the Plaintiff? The actual entity that gave you credit such as Citibank or some collection agency like Unifund CCR Partners? Collection Agencies often have no proof of the debt or any means to get it. Some states require collection agencies to attach such proof to the Complaint.
- Has the original creditor sold the debt or changed names? MBNA changed its name to FIA Card Services June 10, 2006, so if you opened your credit card before 2006 make FIA proves they have the right to sue.
- Can the creditor suing you prove they even own the debt? Send discovery to the creditor such as Interrogatories, Request for Production of Documents, and Request for Admissions to seek copies of each and every bill sent to you, copies of the actual assignment of debt from one collector to another (almost never the 1 page affidavit they usually produce), copies of the original contract and every yearly addendum. If they cannot produce a contract that identifies your account by name or number and by date then they may not be entitled to any interest and may have to prove each and every charge. Imagine how much the bill would be reduced without interest charges. Also- without a contract they may not be entitled to any attorney fees.
Common Defenses You Usually Must Raise in Your Answer or Else You Waive Them:
1) Statute of Limitations
2) Improper Service
3) Failure of Creditor to prove they own the debt or have the right to sue
4) Debt discharged in bankruptcy
5) Identity Fraud
6) Suing the wrong consumer
7) Suing an authorized user without proof of liability accepted (usually more than they just said so. Also credit reports can be wrong especially between husband and wife
8) Failure to give credit for payment (AKA: Accord and Satisfaction)
9) Counterclaims for Unfair Debt Collection
Keep in mind that laws vary dramatically state by state. It is almost always the right decision to contact a lawyer to help defend against collection lawsuits. As a Charlotte Attorney feel free to email questions when sued in North Carolina. Ultimately, you must find out the laws in your state as to how long you have to Answer a Complaint, how long you have to respond to discovery requests, and how you must respond to a Motion for Summary Judgment.
If you’re representing yourself, don’t forget to send them discovery of your own asking for any and everything you think may be an issue with your case, such as when the last payment was made and what proof they have of such payment. Failure to respond to discovery in the time allotted may set up either creditor or consumer to lose or win via default judgment. Although disputing a debt does not mean the creditor will give up it may open then up to better settlement terms or give you time to save up money to begin making payments."
