How to answer a debt collection lawsuit in Minnesota
June 18, 2009 by Todd Murray · Leave a Comment
I recently had a client come into my office with a judgment entered against him by a debt collector. He admitted being served with the lawsuit, but thought it was bogus because the lawsuit didn’t have a court file number on it. And when he called the local courthouse to verify whether the lawsuit was legit, the court had no record of such a lawsuit. Based on this information, he didn’t respond to the lawsuit and the debt collector entered a default judgment and began garnishing his wages.
In virtually every state, a lawsuit is started by filing it with the court. But Minnesota is a unique state because a lawsuit is started by serving the defendant. Because of this quirk, a lawsuit in Minnesota will almost never have a court filing number. And the courts will not have a record of the lawsuit until the creditor files the lawsuit and pays the filing fee. But this doesn’t mean the lawsuit isn’t legitimate. If you’re served with a lawsuit in Minnesota, you MUST answer the lawsuit within 20 days. If you don’t answer the lawsuit, it’s likely that a default judgment will be entered against you without a court hearing.
So the first step to respond to a collection lawsuit is to answer it. An answer is a formal legal document that responds to each of the allegations in the lawsuit. Your answer should be in a format very similar to the lawsuit itself. It should have the same caption, which provides the applicable county and judicial district and names each of the parties. The body of your answer should either admit or deny each allegation in the lawsuit. It’s best to number each paragraph of your answer to correspond with each numbered paragraph of the lawsuit. If you don’t know whether an allegation is true or false, deny the allegation. When you’ve finished responding to each of the allegations, sign and date the answer. You then serve the answer by mailing a copy (keep the original for your records) to the debt collector’s lawyer, or the debt collector itself if they don’t have a lawyer. You don’t have to file your answer with the court and pay the filing fee until the debt collector does.
But answering the lawsuit is just the first step. When they get an answer, most debt collectors will serve you with written discovery, called interrogatories, request for production of documents, and requests for admission. You MUST respond to the debt collector’s discovery within 30 days. Pay particular attention to the requests for admission. If you don’t respond to each admission within 30 days, the admission will be considered completely true. You don’t want to inadvertently admit to owing the debt by not responding to the requests for admission.
If you properly respond to the discovery, the next step is usually a court hearing, most likely a summary judgment hearing. Make sure to respond to the debt collector’s motion papers by the deadline provided on the motion. Then, be sure to attend the hearing and explain to the judge why you do not owe the debt.
If you live in Minnesota and want help answering a debt collection lawsuit, feel free to contact me by using the contact form in the upper right corner of this page. I offer a number of flexible representation options, so even if you can only afford to pay a few hundred dollars, I might be able to help you.
Photo: http://www.flickr.com/photos/shinythings/161216658/
Avoid these defenses to debt collection lawsuits
April 17, 2009 by Todd Murray · Leave a Comment
Lack of a signed contract
Consumers often believe that credit card companies must produce a copy of the contract that the consumer signed to prevail in a debt collection lawsuit. But there are alternative theories used by debt collectors, such as account stated, that may allow them to prevail by merely introducing credit card billing statements. Account stated is an equitable theory where the debt collector must show that the consumer “assented” to the account by receiving billing statements and not objecting to them within a reasonable period of time. But there are numerous defenses to this argument, particularly if the debt collector is a debt buyer.
Hardship
Unfortunately, the fact that you cannot afford to pay the alleged debt is not a defense to a lawsuit. The issue in a debt collection lawsuit is not whether you can actually pay the alleged debt, but whether you are legally obligated for the debt. That fact that you are unemployed, receive public assistance, or are otherwise “judgment proof” may mean that the debt collector will never collect any money from you. But it is not a legal defense to a lawsuit.
Attempted to pay
While frustrating, the fact that the debt collector refused to work out reasonable payment arrangements with you is not a legal defense to a debt collection lawsuit. Courts do not have the authority to force the debt collector to accept the payment arrangement you proposed.
Ex-spouse responsible for payment under divorce decree
Just because your divorce decree ruled that your ex-spouse is solely responsible for payment of a joint debt, doesn’t mean you cannot be sued for the obligation by a debt collector. Divorce courts do not have the power to modify contracts between you and a third-party debt collector. You may, however, be able to sue your ex-spouse to repay you for any money you are ordered to pay the debt collector.
Potential defenses to a debt collection lawsuit
Now that you know how not to defend a debt collection lawsuit, here are some good potential defenses: statute of limitations, unauthorized and/or fraudulent use of the account; identity theft; incompetent or insufficient evidence; and lack of valid assignment of the debt (usually only applicable in debt buyer lawsuits). This is not an exhaustive list and these defenses may or may not apply to your particular case. Consult with a consumer lawyer in your area for specific advice about your case.
If you live in Minnesota and want help answering a debt collection lawsuit, feel free to contact me by using the contact form in the upper right corner of this page. I offer a number of flexible representation options, so even if you can only afford to pay a few hundred dollars, I might be able to help you.
(photo: Picture Perfect Pose)
The first step when you’ve been served with a debt buyer lawsuit
April 9, 2009 by Todd Murray · Leave a Comment
A debt buyer is a business that purchases delinquent accounts from the original creditor and then sues consumers to collect the debts. Because the debt buyer did not originate the debt, it is at the mercy of the original creditor to provide it with evidence to prove its case. In some cases, the original creditor doesn’t provide the debt buyer with any evidence of the debt. And when the original creditor does provide evidence, it often is just a single billing statement that was generated long after the account became delinquent.
Although it seems ridiculous for debt buyers to initiate lawsuits without knowing what, if any, evidence exists to prove their claims, debt buyers nonetheless initiate thousands of lawsuits each month. Why? 95% of collection lawsuits proceed by default and result in judgments being entered against consumers without the debt buyer having to prove its case. This basic premise is why collecting purchased debt is a thriving sub-industry. Debt buyers know that they can obtain thousands of judgments without having to produce a single piece of evidence.
If you are sued by a debt buyer, the first step is answering the lawsuit in a timely manner. An answer is a legal document that responds to the allegations in the complaint. If you are unsure how to do this yourself, contact a consumer lawyer immediately to help you. Failure to answer the lawsuit within the required time will likely result in a default judgment being entered against you without having an opportunity to go to court and defend yourself. But if you respond to a debt buyer lawsuit properly and engage in the ensuing litigation process, you will force the debt buyer to prove its case in front of a judge. Often they can’t.
If you live in Minnesota and want help answering a debt collection lawsuit, feel free to contact me by using the contact form in the upper right corner of this page. I offer a number of flexible representation options, so even if you can only afford to pay a few hundred dollars, I might be able to help you.
(photo: maura)
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