Did you know that 70 million Americans have been contacted by debt collectors? If you’re being threatened with a debt lawsuit, you aren’t alone. And you don’t have to go at it alone!
Facing a possible debt lawsuit? We’re here to help! Here are 5 steps to defending a debt lawsuit.
1. Get a Lawyer
Your best bet is to hire an attorney. You may think it’s a bad idea to pay money to avoid paying money, but it can be almost impossible to find great help with a debt lawsuit without one. And many attorneys offer a free consultation, which can help you figure out if legal help is worth pursuing.
Your free consultation can tell you your options and the cost-benefit analysis. They also provide an outside perspective on your situation.
2. Challenge Right to Sue
Typically, by the time you’re in a debt lawsuit, it has been sold off. That means that the entity that owns the debt has to prove they have the right to sue you.
If you request the chain of custody of paperwork dating back to your original creditor, a judge will likely back your request. And if any of this paperwork is missing or out of order, the judge will throw out the case.
3. Push Burden of Proof
In a debt lawsuit, the burden of proof is on the plaintiff. So they have to prove that they have the right to sue you, that you are responsible for the debt, and the amount of your debt.
You can demand them to account for everything you owe. That means an increase in balance with purchases, proof that you agreed to any charges or fees, and that the current balance reflects all payments and adjustments. Because your debt has likely changed hands, it can be difficult or impossible for them to prove this in a timely and sufficient manner.
4. Point to Statute of Limitations
The statute of limitations is different in each state. While it’s typically 4-6 years, it can be as little as 2 or as many as 10.
The timer starts the last day you were active on your debt-incurring account. Activity means either making a payment or withdrawing funds.
This also means you should be very careful with agreeing to pay anything when contacted about a debt lawsuit. It can restart the statute of limitations on your case.
5. Declare Bankruptcy
If all else fails, and you can’t afford to pay your debts, you can file bankruptcy. When it’s handled, all collection activity has to stop.
But don’t file unless it’s your last resort. It has far-reaching consequences to your credit and financial status.
Of course, you can always try telling your creditors that you’re considering bankruptcy. Because creditors prefer some money over none at all, the threat alone might be enough for them to work out a deal with you.
Now You’re Ready to Defend a Debt Lawsuit
Now you’re ready to face your debt lawsuit! Looking for more personal finance news? Bookmark Tech Patio to stay up to date on the latest!