Tag Archive for: debt defense

Making it Look Hard to Defend

Debt collectors make most of their money by scaring, or tricking, people into forfeiting their rights to defend themselves. That’s far, far cheaper and faster than actually litigating. So debt collectors spend a great deal of time and effort learning how to make people give up. They’re good at that, but if you fight back anyway, you have an excellent chance to win.

Remember that most of what debt collectors are doing with their petition is trying to scare you into giving up. They’re trying to make things scary and inconvenient for you so you won’t protect your rights. Here are some of their more common tricks and some things you can do about them.

One of the most common complaints I hear from people pursued by debt collections is that debt collectors have deceived them into not going to court.Then they get a default judgment and start collecting. Don’t let that happen to you!

Here’s how to spot this one coming– and what to do about it if it’s already happened to you.

The way it comes up is that the defendant (person being sued) receives the summons and petition only a relatively few days before the date given on the summons for showing up to court. The person being sued panics either because the date set is extremely inconvenient or because they do not have the resources to fight the suit regardless of which day is set for court.

They Trick You into Staying away from Court

So you call the debt collection law firm and asks to speak to the lawyer suing you. The lawyer will not speak to you (normally), and so you are forced to speak to some clerk, actually a skilled collection agent. The law firm then plays a “good cop, bad cop” routine, where the person speaking to you takes a message and agrees to get back to the defendant with the words of the lawyer. Or they play “tough but fair” and outright refuse to agree to move the court date.

They routinely move court dates for lawyers.

Either way, they want you to be maximally inconvenienced because they really, really, really don’t want you to show up or defend yourself! They say they will, however, agree to come to an “arrangement” that makes going to court “unnecessary.” Isn’t that nice

Then they either create an agreement and send it to you—or not. But if you think that going to court is unnecessary and don’t go, then the debt collector often “calls for default” (asks the court to give them a default judgment) whether you have an agreement or not.

But the agreement is usually a complete giving up anyway.

NO NO NO NO!

Don’t let this happen to you. If you can’t go to court on the date specified on the petition, think about filing an answer denying the allegations of their suit–and add a counterclaim for unfair debt collection by refusing to “move” (it’s called “continue”) the court date for you when they would do so for a lawyer.

Then you might file a “motion to continue” your court date with the court, telling it that you tried to work out the continuance with the other side but that it would not cooperate. Ask the court’s clerk for the “continuance date” and put that into your motion.

See, courts will almost ALWAYS continue a case if a lawyer asks for it. And if you file an answer first and then your request to continue, they’ll do it for you, too.

If the debt collector has already tricked you and gotten a default judgment, all is not lost. But you must act quickly. You should know that the law does not “favor” default judgments. This means that they lean against allowing them to stand if you make a decent argument against them.

The way you would do that would be to start with a motion to vacate the judgment.

 

Discovery – Starting to Win your Case

It is not necessary to begin discovery at the time you file your Answer and Counterclaim, but if it is at all possible for you to do, it gives you a big advantage.

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Push or Be Pushed – Get that Discovery Started

In the law, it is push or be pushed. That is, if you aren’t already pushing the debt collector to give you discovery or respond to motions, chances are good that they will be giving you things to do. When you’re pushing them, your chances of winning go way up. When they’re pushing you, they go down.

You might not think it would have to be that way. There’s usually plenty of time given to do everything that needs to be done and that the law expects both sides to do things at basically the same time. But theory aside, the reality is that people – lawyers included – will usually do what is pressing them first. And then they may – or may not – do the rest of what they should do.

People in general, and lawyers especially, make sure they’re pretty close to being as busy as they can be. And this inevitably means that choices will have to be made when and if things get tighter. If you push the debt collectors to answer your discovery, in other words, they very well may choose to skip discovery on you. If you skip discovery on them, you will soon discovery they have plenty enough time to keep you busy. That’s just the way things work.

So if you’re in a case where they’ve already served discovery on you, you’re going to have to do double duty – make sure you serve your discovery on them before you give them your answers. If you don’t, the next thing you know they’ll be filing a motion for summary judgment against you.

Better yet, make sure you are first out the discovery gate – and then keep tightening the screws. Serve discovery on them along with your Answer. This requires you to be prepared for your case pretty quickly, but it will pay off in a big way down the line.

Make them Answer Discovery

Do Your Legal Leg Up Materials work against Original Creditors?

Do the YourLegalLegUp Litigation materials work on cases brought by original creditors as opposed to debt collectors? Yes–but watch this video to see how lawsuits by original creditors are different from those brought by debt collectors.

I used to think the difference between debt collectors and original creditors meant more than it does now. Perhaps it’s because there is such a huge amount of debt out there that even creditors lose track of it. Perhaps all the debt makes any one debt cheap. But in any event, the difference between original creditors is less than it used to be. The original creditors often do not have the records they need to prove the debt, and even more often than that they don’t have the will to pursue it if you fight.

In any case, you will pretty much always be better off it you do fight the lawsuit and go through the discovery process – especially if that means filing a motion to compel. It’s work, but if you can prove they don’t have what they need, you can make them drop the case. And if you find that they DO have what they need, your making them work so hard will make them settle for much less than they would have. Or if you can’t settle, you’ll take your best shot – and you’ll have put off the result for quite a while even if you lose.

Our materials will guide you through that process. You need to know how the system works in order to use it, and our materials give you what you need to understand the system.

Importance of Early Discovery

Defend Yourself – No one Else Will

If you’re being sued, you’re going to have to defend yourself – there’s no magical solution, and you will lose if you ignore the suit. Please don’t think that just because you’ve never heard of this debt or don’t think you owe it for any reason, you will win. Once you’ve been served with a lawsuit, you will lose if you don’t take steps to win it. Nothing is automatic.

And the lawyer on the other side just wants to win as quickly as possible. He or she has very little interest in “doing the right thing.” It’s up to you to protect yourself.

If you are being sued for debt, you must defend yourself. What that means, very simply, is actually proving you don’t owe the money to anyone – or, more likely, that the plaintiff cannot prove you owe it to it. There are simple ways to do this (not necessarily easy), and our job is to help you use those methods.

Anything that promises or appears to be an easy or automatic way to win is probably a mistake or a scam.

No Free Lunches

There are other products out there for people being sued for debt, and some of them will encourage you to invoke magic words like “fractional reserve banking” or other concepts which, though legitimate in their place, will not drive the debt collectors out of your life.

Remember that there are no free lunches for regular people in this world. The judges are not concerned about the U.S. Money supply or system, and they are not concerned about any abstract rights of yours at all. You’ll be lucky if you have a judge who understands what hearsay is and doesn’t want to allow the debt collector to use it. Trust me on this. If this case reaches litigation, you must be prepared to understand the way debt law actually works, tell the judge how it works, and hold the judge to his or her job of making sure the trial is fair.

Luckily you can do all that. If you spend your time invoking the ghost of Andrew Jackson or fighting the monster of Jeckyl Island, claiming that the government sold you somewhere as part of the Social Security program, or other, similar ideas, you will lose the case. Debt collectors have a tough time proving what they must prove to be able to win. Don’t let your desire for a shortcut to victory make you lose.

Do not get fancy when defending

As I have pointed out elsewhere, there are other products out there that will tempt you in various ways. One way is to find a shortcut. Another, equally dangerous thing, is to try to hide behind legalese. You may think you’ve found an excellent phrase, like “I know nothing about what you’re saying and therefore deny…”, but you could be burying yourself under an admission. (In this case, that you “know nothing about…” – the denial is a conclusion with no real impact, but admitting you know nothing? – that’s a fact you’ve just admitted.)

Don’t Try to Hide behind Legalese against Debt Collectors

I have recently had a customer tell me she bought a package that told her to answer requests for admissions with “after reasonable inquiry, defendant cannot either admit or deny… [each request].”

It sounds so much more reasonable, doesn’t it, to say “defendant has no knowledge to admit or deny…” or “after reasonable inquiry defendant cannot either admit or deny…” requests for admissions or allegations in petitions. The problem is, if you cannot admit or deny, and the debt collector alleges, there is nothing in opposition to the debt collector’s allegations. The debt collector just says, “defendant admits that, after reasonable investigation, she cannot deny…”

The standard for judgment on the pleadings is no genuine issue of material fact.

Just deny what you can. And you can deny anything you don’t have to admit in almost every jurisdiction. Don’t get fancy. Hiding behind fancy sounding legalese is, in the final analysis, just hiding. The judge knows it, and the lawyers know it. You know it too – or you wouldn’t try it.

You have very strong arguments to make in terms of law and justice. The debt collector has an extremely tough burden to carry. Your every effort should be to make that burden crystal clear – and to prove that the debt collector cannot do it. Legalese of any sort will simply distract from this sharp, clear mission. A clear, rigorous reading of the facts and law is your friend. Vagueness is your enemy. Products which encourage you to hide behind legalese invite you to disaster.

Answer and Counterclaim

It is very helpful to have a counterclaim if you’re being sued by a debt collector. In this article we’ll discuss a few mechanics – things that are obvious to lawyers but might not be so obvious to people representing themselves.

What is a Counterclaim?

First of all, what is a counterclaim? Very simply, a counterclaim is a lawsuit you file in the same court against someone who is already suing you. That is, it is any lawsuit you file, whether or not it is related to the suit the other person filed.

The theory is that if two people are already in court for any reason, they may as well get everything done at the same time, but there are certain exceptions in cases where hearing the cases together would be too confusing, or the like. Many counterclaims do not have to be brought – you can wait till the first case is over and then (if time hasn’t run out) bring your case separately as an original suit. On the other hand, sometimes possible claims are so closely related that you are not allowed to wait: these are called “mandatory” counterclaims, and if you fail to bring a mandatory counterclaim as part of the first lawsuit you will lose the right. A classic example of mandatory counterclaims would be claims by both people in a car crash against each other – waiting and filing separately would be a big waste of court time and might also lead to contradictory judgments.

For debt defense, though, you might think of it as a defensive countermeasure. As in judo, they’ve been attacking you, and now you’re going to use what they’ve done against them.

Claims under the Fair Debt Collection Practices Act (FDCPA) can be brought as counterclaims, but they are not mandatory. You could, if you wanted to, bring a claim under the FDCPA in federal court – or even another state court – while a lawsuit against you for the debt was still underway. As a practical matter, when I was still practicing, I never did that, but you could do it.

Sources of Counterclaims

The FDCPA is the most logical source of counterclaims when you are being sued by debt collectors, for several reasons.

For one thing, the law is very broad. Anything that is an “unfair” debt collection practice is illegal under the FDCPA. Although several things are specified in the Act, many other things have been found to violate the law. That allows you to be a little creative.

Secondly, the FDCPA does not require any sort of “intent” to harm you. All you have to do is show that the debt collector did what you say is illegal. And you don’t actually have to have been hurt by what the debt collector did. That means that the unfair collection practice you claim they did does not have to have fooled you or hurt you at all.

In fraud cases, to give an example of a different kind of law, you have to prove that the person you claim defrauded you meant to do it (intent) and that it somehow harmed you (they did fool you, and you lost money). This makes claims under the FDCPA much easier than most other lawsuits. Finally, there is the question of evidence. Many FDCPA claims arise out of the debt collector’s lawsuit against you, and this will be part of the record, but all of the claims will be relatively easy to prove. Here are some articles that discuss some possible claims under the FDCPA:

There are other sources of possible counterclaims, however. There is a law in consumer law that provides that any time you would have a claim or defense against the seller, you also have that claim or defense against someone trying to collect the bill.That means that if you were ripped off by a seller, and then a debt collector comes after you, you can sue the debt collector for that fraud. If you do, you will probably have some significant advantages, as the debt collector probably does not have access, much less inexpensive, convenient access, to the witnesses it would need to defend the case. And there are other possible claims – like defamation or possible violations of the Fair Credit Reporting Act.

What You Actually Do

Assuming you decide to bring a counterclaim, what you actually do is attach it to your Answer. That is, you create your Answer, and then at the end you add allegations that would support your counterclaim. The materials in my Litigation Manual provide you samples of these.

 

Defend against Motions to Dismiss Part 1

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You Can Beat the Debt Collector

(Even If You Couldn’t Win the Lawsuit!)

If you’re being sued, I’m sure you’re scared. Everyone is. But hear this: you have a very good chance to win the suit if you stand up for yourself. Believe it or not, if you know what you’re doing, the odds are actually stacked in your favor against a debt collector. And it isn’t that hard to learn what you need to know to take them on and beat them.

And even more important, if you stand up for yourself, you will probably beat the debt collector even if you couldn’t win the suit. Read on to see why this is true.

Some Very Basic Facts You Need To Know

If people would stand up for themselves, debt collectors would have a very hard time making any money. Lucky for them, most people don’t stand up for themselves.

The Debt Collector’s Problems

The debt collector will have a lot of problems if you stand up for yourself. They usually don’t have the records they need to prove their case even if you actually did owe the money. And more often than you might expect, you don’t owe them the money because of certain time limits or because they can’t prove they own the debt. They also have certain even bigger practical difficulties that you can use to protect yourself if you know how to find them.

FEAR-The Debt-Collector’s Best Friend

Because the debt collectors would have such a hard time winning if you fight back, they rely on the terror of the collection process to scare you into settling the case or giving up altogether. This fear of the legal process is the most important weapon the debt collectors have. If you can handle that, chances are you’ll get off scott-free. That’s why YourLegalLegUp litigation materials explain how the debt collection business operates from top to bottom.

You Have Almost Nothing To Lose

Strange as it may seem, now that you’ve been dragged into this suit, most of the bad has already happened. It costs very little to fight if you do it yourself. And if the company wins, they are going to get the same thing (in almost every case) whether you fight or not. In other words, it won’t get worse if you fight.

And if you fight and win, as I explain in the section about counterclaims, not only will you not owe them anything, but they may have to pay you.

In other words, you have basically nothing to lose by fighting and everything to win!

Why You Have a Chance to Win

You actually have a very good chance of winning the lawsuit filed against you- if you stand up for yourself. Look at the lawsuit filed against you-the “Petition” it’s usually called. It may look like it was done carelessly, and it probably was. But the paragraphs of the petition say the things the debt company would have to prove to the court-if you stand up for yourself.

They have to prove the existence of a “contract,” or some obligation for you to pay. They have to prove they own the right to sue you. And they have to prove the amount you owe. You might think they could easily do that, but in fact it is difficult if not impossible for them to prove these things.