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Common Defenses to Credit Card Lawsuits

After months of ignoring those debt collection calls from relentless agents and a number of demand letters, it finally happened: you have been sued by a creditor or debt buyer for an alleged debt. Don’t panic, but also don’t ignore the summons and complaint. You should contact a qualified consumer rights attorney immediately to discuss your options and consider filing an answer or motion for extension of time in the lawsuit.

The answer does just what it sounds like—it answers the allegations in the complaint. In many cases, the attorney for the defendant will simply deny most of the allegations. However, the attorney will also need to set forth any possible affirmative defenses, regular defenses, and counterclaims that may be necessary.

Affirmative defenses are often the most helpful in a debt collection lawsuit. An affirmative defense is a legal theory that says, “Even if the allegations in the complaint are true, the defendant does not owe the debt for this specific reason.” If an attorney, or the consumer themselves, fails to raise a specific affirmative defense in the answer, then the defendant will waive his or her right to waive that defense in the future.

For that reason, it is important to know what some of the most common defenses are to credit card and other consumer debt lawsuits. Some of these include:

Statute of Limitations

The statute of limitations (SOL) is the time period within which a collector must bring a lawsuit against you to collect a debt. If the creditor fails to pursue a debt within the SOL, that debt can never be collected. In Florida, the statute of limitations is generally five years. The clock on the SOL usually begins ticking on the date of the first missed payment, but the actual date will depend on your specific circumstances.

Lack of Standing

A person or business entity must have legal standing to file a lawsuit. Standing is a huge affirmative defense in collections lawsuits, often because debts are frequently bought and sold. Standing means that the company or entity has the legal right to pursue a lawsuit.

For example, suppose American Express sues you after you default on your credit card payments. If American Express sells that debt to a third-party debt buyer, that debt buyer must be able to prove that it actually and legally owes the debt. If it cannot, it does not have standing to pursue a lawsuit.

Standing frequently becomes an issue when a debt is several years overdue. After being bought and sold several times, it is not uncommon for a debt buyer to be unable to produce the documents which prove that it purchased the debt.

Failure To State A Claim Upon Which Relief Can Be Granted  

The phrase in this heading is a legal term which is wordy, but exceedingly common. In order to win a lawsuit, you must present a triable issue of fact upon which a judge can legally decide. If there is no material issue of fact, the judge cannot make a decision. As a result, failure to state a claim upon which relief may be granted is one of the standard affirmative defenses used in almost all civil lawsuits.

For instance, suppose a lawsuit is filed against you in court for a debt that is in someone else’s name. The defense attorney in the case would almost certainly raise failure to state a claim upon which relief can be granted as an affirmative defense. Even if everything in the complaint is true, the judge in that case could not decides whether or not someone else owes a debt to a particular creditor or debt collector; the creditor or debt collector would need to sue the right person, at which point the judge may be able to decide that claim.

Help for Consumers

In addition to the defenses listed above, there are multiple ways that the attorneys at Loan Lawyers can help you defend yourself from creditors and debt collectors. To discuss the specific facts of your case for free, contact our South Florida debt defense attorneys today by calling (888) FIGHT-13 (344-4813).