The Growing Trend of Credit Card Debt Lawsuits - Will You Be Served a Summons?

It used to be that once a creditor charged off a debt as "bad debt" and wrote it off their books, the debt was done. No more, my friend. Today, collecting on old and even "out of statute" debt is big business. One large collection agency or "junk debt buyer" as they are commonly referred to, is purported to file an average of 279 credit card collection lawsuits per day!

That's 66,960 lawsuits from just one company! Scary.

A collection lawsuit is often a final attempt to collect a debt. If the harrasing and illegal phone calls were not enough, now you have Mr. Process Server knocking on your door!

The good news is that by the time these predatory debt collectors get to you, there's a good chance your debt is out of statute. The SOL on credit card debt can range from 3 to 10 years, the average seems to be about six years from the date of last activity (DOLA) or the last time you made a payment.

Can I just ignore the lawsuit?

No! Once a default judgment is entered (which is what happens when you do nothing) all of the potential defenses to the lawsuit are lost and the collector does not have to prove their case.

The collectors are literally banking on the fact that the majority of consumers do not respond. Default judgments are goldmines for creditors as it means they do not have to prove you owe the money, how much you owe and most importantly the agent for the credit card company or other creditor does not have to come to court.

A default judgment grants the creditor the right to garnish your wages, freeze a bank account and/or put a lien on your property.

How to Respond

You need to file what is called an "Answer". However, you have to be careful. In some jurisdictions all of the defendant's (you) affirmative defenses must be filed at the same time the original response is filed with the court or the defenses are lost forever.

An example of a defense to a debt lawsuit would be out-of-statute, statute of frauds, improper plaintiff, invalid debt transfer, and violation of the Fair Debt Collection Practices Act just to name a few.

You need to file an "Answer, Affirmative" document which will line-by-line answer each numbered paragraph in their complaint with an Affirm, Deny, or Lack Knowledge Of statement. You then go on to assert your defenses to their lawsuit. This should usually be done on 28 lines pleading paper.

If you are sued, it's best to contact an attorney to help determine what defenses might be applicable. If you are unable to afford one, you can check your local legal aid office for help.

However, it is very possible to defend yourself (called being a Pro Se litigant) in this type of lawsuit. Many people I've corresponded with have successfully "Answered" their lawsuit and had their cases dropped. If you are proactive and fight these collectors head on, they often buckle and move on to the next "default" prospect.