#1 Best Free Tip If Sued by Debt Collectors

When you first receive litigation paperwork, your first instinct may be to just call up the creditor – or, at this point, the creditor’s attorney – and pay what they’re saying you owe. You just want to make everything go away, to make that awful combination of emotions stop. To ease that pit in your stomach, to know that you’ll be able to sleep through the night at long last. To feel Ok again. So, you pick up the phone and open your wallet.

Or maybe you do nothing. You stash the Complaint away in a drawer, or in the pile of junk mail you will someday get around to sorting through. You realize, on some level, that ignoring the Complaint won’t make it disappear – they tell you as much in the Complaint itself – but, again, you just want to feel Ok, and the more you think about this lawsuit, the less Ok you feel.

Let me take off my attorney’s hat for a second and give you whatever comfort this may provide: It’s Ok to not feel Ok. Being on the receiving end of a lawsuit is a frightening experience.   

They are counting on the fact that you may be scared into paying whatever number they’ve come up with. They’re counting on the fact that you may choose to simply not appear at the scheduled hearing. They’re counting on your fear to do their work for them.

Chances are good that the Plaintiff suing you isn’t anyone with whom you’ve ever done business. Instead, they are likely to be a Third-Party Debt Buyers. These companies purchase debt accounts from original creditors, often in bulk (meaning hundreds or thousands of files in one transaction), typically for pennies on the dollar. They then turn around and attempt to collect on the full amount of the account, bringing hundreds of lawsuits in the process. It’s simple math: Purchase a debt for $5.00, collect $1,000.00, and you’re up $995.00!

Here’s the thing: The simple fact is that a Plaintiff bears the burden of proof in establishing each element of their claim against a Defendant. Among the most rudimentary elements of any claim being made is that the Plaintiff has the legal right to do so. So a Plaintiff must either show that you owe them money directly, or that they purchased your account – and thus, the right to sue – from that company.

Why does this matter? Because very often, Third-Party Debt Buyers do not have the documentation necessary to show that they have the right to sue you. So, right at the outset, a Defendant can deal an often-fatal blow to the Plaintiff’s claims, provided the Defendant’s attorney knows how deliver it. That is where I come in.

For Original Creditors, the approach is a little different, but a Defendant still has robust and effective defenses against an Original Creditor lawsuit. Specifically, while an Original Creditor may be able to show they have the legal right to initiate the lawsuit (though with banks frequently purchasing each other, this is not a given), they still must show another basic fact: That you owe the exact amount they’re claiming you owe.

How do they do this? Again, documentation. Do they have it? Again, probably not, at least not in the initial Complaint they file. Keep in mind that creditors’ law firms, whether representing Third-Party Debt Buyers or Original Creditors, operate on the “Default Judgment” business model.

As I mentioned earlier, they are counting on you doing nothing…so they do as little as they can get away with.

A Plaintiff doesn’t have to prove their entire case when they file a lawsuit, but the Pennsylvania Rules of Civil Procedure and Pennsylvania case law have set forth certain requirements that a creditor must meet before a Complaint is considered valid enough to move forward. However, enforcement of these rules is not automatic.

A Defendant must assert – and prove – that a creditor’s Complaint is defective…and because creditors never anticipate a Defendant responding, they are vulnerable when they do. Creditors’ Complaints are almost always skeletal, threadbare documents, containing maybe a single monthly statement and maybe a boilerplate cardmember agreement that they pulled from the company servers. Or not. I’ve seen Complaints that had not a single syllable of supporting documentation.

Pennsylvania law frowns on this, and the Courts will often dismiss bad Complaints and require the Plaintiff to rewrite the Complaint (called an “Amended Complaint”) that is in compliance with the law. If they can’t – or don’t – the Defendant can go on offense.             

If you have been sued by debt collectors, whether a Third-Party Debt Buyer or an Original Creditor, please call me. I don’t charge a fee for initial consultations. The worst thing you can do right now is nothing. That’s what they want. You have defenses…use them!