Tag Archive for: debt defense

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.

Discovery – Requests for Documents

This is going to be a brief article. For a fuller discussion and samples, look in the Litigation Manual and Forms. Still, you should be able to create your own after reading this. If you do not already own the Debt Defense System, you should consider it. Membership with us allows us to help and guide you every step of the way.

As with other discovery, Requests for Documents are controlled by the rules of civil procedure for your jurisdiction. And there are two sets of rules you must consider: your state rules in general and, if you are in some sub-court of the state, the rules regarding your court; and your “Local Rules” if your court has them.

Sub-Courts

An example of what I mean by “sub-court” might be what we have in Missouri, Associate Circuit courts. These are courts that are designed to handle smaller amounts of money. Or small claims courts (even less money). Many states have similar types of arrangements, and these sub-courts will have their own special rules, and these rules always control when and how much discovery you can conduct. I normally suggest that people avoid these courts because the can be a little too relaxed about the rules. Relaxed rules may seem “easier” for you, but in reality what they do is let the debt collectors get information in that they couldn’t otherwise – and your best chance of winning is to keep that evidence out.

Even if you’re not in that sort of sub-court, your court may have “local rules,” which are rules designed to elaborate on your state’s rules of civil procedure. The rules of civil procedure will create the general structure of discovery and set the penalties for not cooperating – the local rules will establish certain limits: only a certain number, for example, or that they must be in a certain format (not “compound,” usually, meaning without sub-parts).

Whatever the situation, you must find the rules controlling your discovery, or you may do something wrong, giving the debt collector an easy out. To find your rules of civil procedure, follow this link. Any special rules may be mentioned in your rules of civil procedure or in your court’s web-page. I am not aware of these rules – but you must be.

Content of Requests for Documents

The term “document” for purposes of requests is very broad and contains things like electronic records, facsimiles, any non-identical copy of a record, etc. The term is usually defined in the rules of civil procedure, and the way you would define it is to refer to that rule: “by requesting documents, defendant intends all documents as defined by Rule ___, ____Rules of Civil Procedure.

What You Request

You want everything thing the debt collector could use to support its case or attack yours. At a minimum you should ask for any document in their possession or control which you signed or which they contend applies to you in any way. You want all documents relating to the amount or terms of any alleged debt, every document showing or relating to any agreement you made with them, including any notes or comments. You want every document showing or relating to anything you said. If you have a counterclaim, you’ll want to create requests that get everything they have related to that.

Standard

The standard for requests for production is that you are asking for documents in their possession or control. Possession is obvious, but control includes documents that other people have created for them or in support of their business: accountant’s records, for example, or account records (of your account) if the original creditor agreed to provide them if requested. If these documents are not provided or objected to, but then they try to use them at court, you should request to have them excluded from trial.

Objections

When the other side objects – as they will, to everything you ask – you will, eventually, have to eliminate those objections so that you can be sure you have everything they have. Just because they deny having something you would expect them to have, though, does not mean you can file a motion to compel. Rather – once they have answered, you pretty much have to take them at their word for not having stuff they say they do not have. That is, unless you have evidence they are actually hiding something.

Four Sneaky Tricks of Debt Collectors

Debt collectors make their money by scaring or tricking, people into forfeiting their rights to defend themselves. Often they will let you think you have come to some sort of agreement with them to avoid court (and judgment), they won’t work with you to accommodate your schedule, and in general try to trick, intimidate and scare you into staying away from court. Then they get default judgments. Here are some of their more common tricks. Check out the Litigation Manual and materials for things you can do if debt collectors try these on you.

Don’t let them trick you out of your right to defend yourself. If you fight, you have an excellent chance to win – if you don’t show up and they get a default judgment you may find your wages or bank accounts garnished before you know it.

How to Argue Motions in Court

What to Say and How to Say it

When you’re sued for debt, you may need to make or defend motions in court, and this sometimes means making arguments before the court. This video will help you know what to say and how to argue motions in court.

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You are Either Winning or Losing

Today’s tip is about “keeping on track.” That is, sometimes people facing debt litigation are challenged by the mere numbers, and the debt – and everything about the case – can seem unreal and meaningless. Today’s tip is to remind you that it is real, and it does matter.

First, the deadlines are real, and they do matter. If you neglect to respond to discovery, for example, and the the time for responding to requests for admissions passes, you will likely face a motion for summary judgment. If you cannot get your responses permitted, you will probably lose the case. If the debt collector adds fees and manages to make them stick by means of a judgment, then you will likely spend a lot of time and effort trying to pay them – and get caught on the wheel of endless poverty. Unless you find a way off. Better to avoid that wheel!

It All Matters in Real Life

My point here is simple, though. It seems, when you have ten, twenty or fifty thousand dollars of debt, that a few bucks more won’t count. It seems that if you have two lawsuits pending against you already, it won’t matter if you take actions to avoid a third – or settle down and begin fighting them one at a time.

At a lower level, it looks like if you’re missing a payment, it doesn’t matter whether the late fee is correct or not.

In reality, it all counts.

I’m not saying that you will pay, dollar for dollar, on any money that is owed, but you will pay, one way or another, for everything that happens. The world is full of strange twists and turns, and all kinds of things happen – you inherit money, or one of the creditors drops the ball and disappears. One of them might make a settlement offer, or you need to refinance your house… if you don’t take care of what you can, your ability to act becomes more and more constricted.

There are no free lunches in this world, but if you keep trying things tend to work out eventually one way or the other – and the better you start, the more likely you are to have things work out in the end.

It All Matters in Litigation

In the world of litigation, on the other hand, it also all matters. In a way, the only thing that counts is the final score: you win or they win. But that’s not really the way it plays out. And the reason for that is actually similar to the reason the debt all counts. People – all people, but specially lawyers – are constantly evaluating what they should do. Should they drop the case and move on to someone a little easier to beat? A little more likely to pay? Could they actually lose the case? And how many other judgments could they get instead of pursuing you?

Cases almost never go to trial. Instead, the lawyers are constantly assessing the risk-reward ratio of continuing in the direction they’re going. If you are conducting yourself well and pushing them hard, it is more likely they will let you go and go off in search of easier victims. If you are doing the things you should do, and not doing the things you should not – you will make yourself a harder target.

You won’t necessarily know they’re going to give up until they actually do, so you have to play every play like it matters.

Three Questions and Answers about Discovery Part 2

When Does the Process Begin, What Is the Court’s Role, and How Do the Methods of Discovery Relate to One Another?

Click Here for Part One of this Article.

I get certain basic questions about the discovery process quite often.

  • When can you begin conducting discovery? And when can the debt collector do it?
  • How do interrogatories, requests for documents, and requests for admissions relate to one another?
  • And What is the Court’s involvement in the discovery process?

The answers aren’t always clear, but this article will answer these questions to the extent they can be answered.

What Is the Relationship between Interrogatories, Requests for Documents, and Requests for Admissions?

The discovery methods have no necessary connection, although you might notice that most requests for documents ask the other side to produce all documents “identified in your responses to interrogatories,” and many interrogatories from debt collectors ask you to explain why you denied any request for admission. I don’t usually suggest the question about requests for admissions because the only reason for denying a request for admission is that you don’t know it to be true. Period. But maybe a more sculpted question: “for every request for admission you denied, if you believe it to be untrue, state every reason…” Worth a shot, maybe.

In any event, all the methods of discovery are aimed at the same goals – to learn from the other side any information they have that either helps their case; hurts their case; helps your case; or hurts your case. Since you want them to tell you what that information is and how you can get it, or you want them to give you any of that information that is in their possession, it does make sense to connect your interrogatories and requests to make them do that.

What is the Court’s Involvement in the Discovery Process?

No Real Involvement in Most Jurisdictions

In most jurisdictions, there is no court involvement in the discovery process unless and until a motion to compel becomes necessary. Even in those jurisdictions, a lot of people will send a “notice of service of discovery” which simply informs the court of the date and type of service certain discovery was served on the other side: “On this date, defendant served his first set of interrogatories, requests for admissions, and requests for production on plaintiff by first class mail, postage prepaid, at the address noted below as the service address.” You can find an example in the document bank.

In Rare Jurisdictions

In a very few courts – I just heard of one last week for the first time – the courts still take copies of the discovery. That’s a question you could ask a court clerk and probably get an answer, because if they don’t want it, they really don’t want it.

How Most Courts Oversee Discovery

What happens is simple. You serve discovery and the other side answers or objects. In debt law cases, the debt collector will always object to everything, or almost everything, you ask. If you take no further action, nothing will happen. No one looks out for you! If you want to force the debt collector to answer, you must file a motion to compel (and typically you have to send them a “good-faith” letter to try to get them to agree to answer, first). Then you attach all your discovery requests and their answers and objections, and file it with the court. That’s the first time the court will see it, so your motion to compel has to be thorough and complete.

And there’s more. After the other side responds, you will need to “call” (schedule your motion with the court) and argue it in front of the judge in order to get the court to rule. The court will either sustain their objections or overrule them and order them to answer the requests. If it orders them to produce answers, it will usually give them a little time to do that.

Why you should Win if Sued for Debt

What you should do if you’re worried about bills or debt collectors – real help for real people

In this article we’re briefly going to jump right in – actually all the way in – to the topic of debt collection. That’s because I want you to know, in a solid, specific way, why you have such a good chance to win if you get sued by a debt collector. You’ll see that by the time we finish this video.

There’s much more to learn, of course, and we’re even going to go back and fill in a few of the gaps from today’s discussion, but for now I want to show you that defending yourself from debt collectors isn’t – and doesn’t need to be – magical in any way. There are no secret methods here, no weird or bizarre tricks like writing things at angles or declaring that your mother sold you into slavery when she signed your birth certificate. There’s just knowing who the debt collectors are and how they operate, and knowing what to do about that in court.

Anybody can do it. Really. And if you do it, you will probably win your case.

Now before I get started, I want to tell you a little bit about lawyer-speak. I do that sometimes, and I want you to know how to take it. For example, I said above that if you understand what I’m about to tell you and do it right, you will “probably” win your case. Against almost all debt collectors and except in rare situations, I mean that you absolutely should win your case. But… nothing in legal life is guaranteed. It’s drilled into us in law school and later in practice that unexpected things happen, and people do wrong – they don’t know something, pay attention, or care sometimes when they should. That stuff happens, we all know it does, and it’s why I say things like “probably” when other people might sound more certain. I have a habit of speaking more precisely. Marketing and advertising is usually the opposite of that. So don’t worry – I wouldn’t tell you stuff if I didn’t think the chances were overwhelming that it would do you good. See that? I did it again! And I’ll probably do it all through these videos and articles. Don’t worry about that.

Okay, so you didn’t know it, but we were talking about what’s called the “Rule against Hearsay.”

That’s what’s called a “rule of evidence.” Rules of evidence control what a court is allowed to consider in rendering its decision. In debt collection cases, this is absolutely critical. I estimate that fully 95% or more of every debt collection case that actually goes to trial or is resolved on motion for summary judgment, will be determined by the way the rules of evidence are applied.

We’ll go into this in more detail later. For now, I want you to understand that courts are allowed to consider only evidence given under oath in court – unless there’s a specific rule that would allow something else to be considered. Think about it – among other things, that means that business records are not allowed – because they’re not evidence given under oath in court – unless there’s a specific rule that would allow them in.

The rule that debt collectors use is the “business records exception” (to the rule against hearsay). That rule is slightly different in different places, but it always requires someone who is familiar with the way records are kept to testify to certain specific things. And DEBT COLLECTORS ALMOST NEVER CAN TESTIFY TO THE WAY RECORDS WERE KEPT BY THE ORIGINAL CREDITORS. That means that if you object and know what to say, the debt collectors can virtually never get their most important evidence in front of the court. They must lose their case then, and you must win.

We’ll talk more about the specifics later, but bear in mind that debt collectors buy vast quantities of debt at a time, and they so rarely need effective affidavits from the original creditors that they really essentially never get them. They probably won’t have them in your case, and won’t be able to get them, either. If you know how to object and (1) invoke the rule against hearsay and (2) point out their inability to follow the business records exception, you should be able to win your case.

Sometimes judges aren’t ready to listen to you, and we’ll talk about that in a later video, too. But for now: learn how to use the rule against hearsay, and you should win your case. No magic. Just the rules of evidences as they SHOULD be applied.

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