Defense Preparation for Credit Card Lawsuit

On explaining his success, a sportsman recognized for his achievements stated that: “A winning effort begins with preparation”.

It’s a simple concept but one that is fundamental whatever challenge we are facing.

A credit card lawsuit is a particularly troubling ordeal that catapults an ordinary person into the unfamiliar, merciless world of debt collection and law. However, contrary to popular belief, winning is possible, even against large credit card companies and that ‘winning effort’ must begin with good preparation.


The Process

Before we run ahead of ourselves by visualizing a heroic victory, it is a good idea to understand the various phases of a credit card lawsuit. The following is a basic outline of a typical lawsuit.

  • The Summons, Complaint and Answer
    Initially you will receive a court order (summons) and allegations against you (complaint). Your answer signals your intention to defend yourself and moves the process onto the next phase.

  • Discovery
    This is where both parties can gather information about the opposing party by requesting information, admissions and documents.

  • Motions
    Typically, these are requests to dismiss the case based on legal grounds. Motions can happen at any time.

  • Mediation / Arbitration (Optional)
    In some cases you may be required to participate on one or both of these phases in order to reach a settlement or judgment.

  • Court Hearings (Optional)
    These can happen at any time and are related to scheduling where there is an attempt to move the case along.

  • Trial
    Customarily the last phase in a case where a decision is made using all of the evidence, documents and information obtained through previous phases and by using witnesses and interviews.


Answering Your Summons

This is not optional under any circumstances. Any reason you think you may have for not responding to your summons and complaint is not valid.

If you do not respond correctly to your summons and complaint, you will lose the lawsuit by default. The plaintiff (the credit card company or third party debt buyer) will be awarded a default judgment against you and as a consequence can begin attempts to collect their inflated fees by garnishing your wages and freezing your bank accounts. A recent study discovered that in New York State around 42% of all debt lawsuits resulted in default judgment. In some areas the rate was as high as 95%. That is an astounding statistic and shows that creditors and junk debt buyers are being allowed to sue and collect without any contest.

We can undoubtedly say that they really do not care whether you respond to your summons or not. In fact, they would rather that you did not respond, so they can easily collect their default judgment against you and their subsequent pay out.

Do not allow them such an easy victory. If you need help responding to your summons, do the research necessary. The Defendant’s Package is an excellent resource to help you file your answer.


Deadlines

Whether it is for the answer to your summons or the response to a request for admissions or interrogatories, notice that it is vital to reply by the deadline.

The defendant is given a set amount of time to complete their answer. This is usually between 20-30 days but you need to check this according to the documents you are replying to as well as your local court rules. The allotted time may change according to the state where you live.

This is essential for the same reason that actually responding is crucial; if you file your response to your summons after the deadline, the plaintiff can receive a default judgment against you.


Have They Stated a Valid Claim?

The majority of lawsuits must be filed and initiated within a given amount of time before it expires.

Once it has run out, the claim is no longer valid and the credit card company or junk debt buyer cannot take legal action. This is called the statute of limitations and varies from state to state. In some areas it is as little as 3 years, which means the plaintiff only has 3 years in which to file a lawsuit on a defaulting account. This clock generally starts ticking from the time you first default on a payment.

Check and see if your statute of limitations is in date and if it is not, the claim made by the plaintiff is not valid.

The Defendant’s Package explains how you raise this as an affirmative defense in your answer or how to file a motion to dismiss based on this statute.


Facts Versus Fiction

In your complaint you will have read a number of allegations against you ranging from simple claims such as opening an account with a specific credit card company to extravagant accusations that you owe the company sums totaling exaggerated amounts.

Remember that at this point, these are purely allegations. The plaintiff in the case has the burden of proof which means that they have the responsibility to prove the allegations. This evidence can come in many forms including documents, signed contracts and witnesses. However, do not accept that these are all what they appear to be.

Let’s take an affidavit, for example. In a credit card lawsuit, this should be a sworn and signed statement by someone from the original credit card company confirming that the defendant opened an account and defaulted on payment for the amount stated. However, many third party junk debt buyers purchase debt and then create affidavit using someone from their own company. This cannot be valid or legal as an employee of the junk debt buying company cannot attest to anything that occurred in the original creditor’s company. This is not just deceptive behavior, it is also fraud but it appears that it is common place.

The NEDAP study mentioned earlier discovered that ‘in 9 out of 10 cases, an employee of the debt buyer, who had no connection to the original creditor, fraudulently testified to facts’.

Check every document and piece of ‘evidence’ that you receive from the plaintiff and do not accept the fiction that they are trying to pass as fact in your case.

The Defendant’s Package can help you prepare even more thoroughly for your credit card lawsuit.