Avoid these defenses to debt collection lawsuits
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.
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)