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Why Should I Defend My Credit Card Lawsuit?

You’ve just been served. The credit card company is suing you. You’re scared and don’t know what to do. You want to bury your head and hide.

What if, with a little effort you could turn this frightening event into a victory for you?

When you’re sued, your world can seem as though it’s caving in. The forms are unreadable, the clerks at the court are not helpful, and you suddenly can’t concentrate.

When you’re sued for a credit card debt, your immediate reaction is likely “I do owe them money, but I can’t believe I owe them that much.”

Your attorney, on the other hand, will not immediately concede that you owe the credit card company or debt collector any amount at all.

Your attorney will ask questions. The first questions will be: How old is the debt? How long has it been in default? Is the party suing the original owner of the debt? If not, how did they obtain the right to sue for the debt? Did the creditor violate the Fair Debt Collection Practices Act? Is the debt calculated correctly? Does the Plaintiff conduct regular business in California? Is the plaintiff registered with the Secretary of State?

A suit for credit card debt is almost always defendable, in whole or in part. The question is: do you know how to defend the suit yourself, do you know what your defenses are, do you know what questions to ask, do you understand the rules of civil procedure, or should you hire an experienced competent, aggressive attorney to help you?

Q: How Can I Win Against A Credit Card Company?
A: Your Adversary Is Almost Always Unprepared

Debt collection is a huge business. H U G E. Most debt collection law firms (at least the ones who do work for credit card companies and debt collectors) are playing a numbers game – they file thousands of lawsuits every month, and they count on you being so scared or unprepared that you default out, don’t answer, and let them take the default judgment.

When clients decide to hire an attorney and fight the credit card lawsuit, however, the debt collectors are totally unprepared. Their volume model based on defaults simply doesn’t work when they have to actually prosecute their case. Suddenly, someone’s got to dig up all the relevant documents that we force them to produce, to prove up the case.  Then, their attorneys have to make time in their schedule for the court appearance.  They also must read our Answer and other documents in order to figure out how to fight against us (and you).

Q: How Can I Win My Credit Card Lawsuit Against a Huge Law Firm?
A: Credit Card Lawyers Are Overburdened

Each debt collection law firm (there aren’t that many of them who we come up against regularly: Hunt & Henriques, Spiwak & Iezza, and half a dozen others) files thousands of these cases each year, which is far more than any person or group could be expected to stay on top of – except in this case each collection is merely a push-button operation, in which they feed debt into their machine, which then spits out default judgments. It’s a high-volume operation.

The business model of these firms is based solely on the fact that most people will default on the credit card lawsuit. This permits their lawyers (and mostly their paralegals) to swoop in, garnish their wages, levy their bank accounts, and generally cause a messy panic.

However, once you actually defend your lawsuit, you’ve derailed their money train.  They need to do something to shut you down.

Q: Why Can A Good Attorney or I Win Against Collection Agencies?
A: Credit Card Lawsuits Are Bloated With Problems

Your credit card debt is usually sold over and over again before one of the debt buyers files the lawsuit against you.  Most of the time these sale transactions occur in quantities of up to hundreds of millions of dollars of debt – often without any documentation being sent from the seller to collection agency or debt purchaser who buys the account. By the time someone files a lawsuit, the paperwork is nowhere to be found.

Therefore, you (and the Court) can’t rely on what they say in the Complaint. Remember, the job of the Plaintiff in a lawsuit is not to prove that you owe the debt – it’s to prove that you owe the debt… to them. The questions your attorney will ask include: “Who is the true owner of the debt?  How did the plaintiff calculate the balance they allege you owe them, and is it correct?  Did the debt collector bring the litigation against you within the statute of limitations?  Which state’s laws control the credit card agreement?” and more

The debt buyers don’t know.  Absolutely, if it mattered to them, they could go back to the original credit card company and figure it out.

Q: Why Doesn’t the Debt Buyer Get That Information?
A: To Them, It’s Easier to Settle or Dismiss the Lawsuit

It’s like Russian Roulette.  Tens of thousands of times every year, the debt buyers spin the cylinder, get a default, and make a TON of money.

However, every so often, they spin and get someone with a lawyer who knows what’s going on. That produces an entirely different result.

In the Right Hands, A Fight Is A Better Idea

If you get sued by a credit card company, you can do nothing and face the consequences, which will include a default judgment on your credit history, and possible wage garnishment and bank levies.

Or you can call a lawyer who knows how to defend the case and get a better result (hint, hint).

Which sounds like a better idea to you?

Estate Planning Attorney Eric Ridley