I Defend Credit Card & Student Loan Lawsuits
If you have been sued by a credit card company, don’t fold your hand! We have a lot of options, and there are many ways to defend credit card and student loan litigation
When a credit card company or debt collector sues you, it will serve you with a summons. You will need to respond to the suit within the time provided in the summons. In most instances, you will need to raise your defenses (known as your “affirmative defenses”) in that response or they will be waived.
Common Defenses to Credit Card Debt Lawsuits
The following are common defenses which might apply in your case:
Improper Service of the Summons and Complaint
If the creditor has not served you correctly, you need to assert this in your initial response to the suit.
Statute of Limitations
This means the debt is too old to be enforced. The time a creditor has to file suit against you is limited by law in each state. The time starts running from the last date you make a payment. A payment to a debt collector who is hounding you will start the time running all over again.
Fair Debt Collection Practices Act
The FDCPA is a federal law, and the Rosenthal FDCPA is a California Law, that governs the actions that can be taken to collect debts. “Debt collector” is defined broadly to include anyone from the companies that call you when your payment is late to attorneys hired to file suit. It requires collectors to provide you with validation of your debt when you request it and stop collection activities until they do. It prohibits certain collection activities such as threatening to sue on debt that is beyond the statute of limitations.
If a suit has been filed against you, you can assert FDCPA violations as a countersuit or setoff in that action. You can recover actual damages, attorneys fees, and additional damages of up to $1,000 per violations if the violations are found to have taken place.
Lack of Standing
A creditor can only sue you if it has a relationship to you. Credit card companies often sell bad debt to debt purchasers. If the party that sues you is not the original creditor and you assert lack of standing as a defense, it will have to prove that it has the right to sue you. Often these debt purchasers will attach bills of sale or other documents to the suit which show that it bought debt from your creditor, but not that it bought your particular account. If you assert lack of standing, the debt purchaser must show proof that your account was one of those that it did purchase. While it sounds easy, some debt purchasers can’t do it.
Sometimes the debt is sold more than once. When this happens the current debt owner may have trouble getting documentation that is sufficient to meet the proof requirements of the court. Much of this debt is transferred using computer generated lists without signatures nor affidavits. Once the debt has been transferred to two or three different entities, the original creditor often will not supply any further information. If this is the case, it may make it difficult for the creditor to meet the proof requirements of the court which generally require that the creditor have a witness that can testify as to the accuracy of the business records (at the time they were made) from personal knowledge.
Payment of the Credit Card Account, in Part or in Full
Payment is always a defense to any collection action. Often it is a valid defense even if you paid another party. For example, if your debt was sold and you accidently paid the wrong party, the new owner might be required to obtain the payment from the original creditor if you did not receive adequate notice of the debt transfer or sale.
You can also assert payment as a defense if you paid only part of the debt. A creditor is not entitled to a judgment for more than what you owe.
Fraudulent Credit Card Charges
This applies in the case of identity theft, a stolen credit card, or when a business processes your credit card improperly.
But if this happens to you, don’t wait until you have been sued. Notify the credit card company as soon as you see the charge and make a police report. This will provide you with evidence for your case if the charge is not removed from your statement.
Discharge in Bankruptcy
If you have received a discharge in bankruptcy and you properly listed the credit card debt in your schedules, you are not responsible to pay the discharged debt. You must assert the discharge in bankruptcy as a defense to the suit.
If you have been sued on a debt you do not owe because you have a name that is the same or similar to the name of the person that owes the money, you can assert mistaken identity as your defense. Make sure you demand proof that you owe the debt and ask the court to make the creditor produce the original documents so that you can show that they don’t include your signature, address, social security number, or other important information.