As Credit Card Debt Increases in Fort Lauderdale, it is Important to Know Defenses to Lawsuits

Even as difficult as 2020 was for millions of people in the country, according to WalletHub, people paid down $82.1 billion in debt during the year. Unfortunately, the news has different meanings for people in different parts of the country. Here in Fort Lauderdale, for example, the average household is still carrying approximately $14,400 in debt. That is not only the highest in the Sunshine State, but it is also nearly twice as much as the national average, which stands at $7,519 per household across the country.

Much of the credit card debt people in Fort Lauderdale are carrying no longer belongs to a credit card company. Instead, it belongs to debt collectors that have purchased the debt from the original creditor for pennies on the dollar. Still, when the debt goes unpaid, these debt collectors have just as much right to file a lawsuit against borrowers. If you are being sued by Portfolio Recovery Associates, Midland Funding, Cavalry Portfolio Services, LVNV Funding, or any other debt collector, below are some defenses that may assist you with your case.

A Lack of Standing

One of the most common answers in a debt recovery lawsuit is that the plaintiff lacks standing to file the lawsuit. A lack of standing simply means that the debt collector does not own the debt. Many borrowers automatically assume that if a debt collector is suing them, they do have the standing to do so. This is not always the case. The debt collector must also prove that they have standing.

When a debt collector purchases a debt, or a bundle of debts from a creditor, the only documentation they receive is a ‘Bill of Sale,’ or ‘Assignment,’ and these are generally photocopies and not the original. These documents also do not always reference your account individually, which may prevent the debt collector from proving that they own your debt.

A Lack of Evidence

Along with standing, debt collectors must prove several other elements related to their case. These companies will often present documentation to the court in an attempt to prove their case, but the court may find it inadmissible. For example, a witness is often required to establish the reliability and authenticity of the credit card statements. It is not uncommon for the witness for the debt collection company to not have personal knowledge about the record-keeping practices of the original creditor and so, their testimony could be deemed inadmissible by the court. Without adequate testimony, the debt collector will likely have a hard time proving its case.

Failure to Satisfy a Condition Precedent

Under Florida law, debt collectors must notify the borrower that they purchased their account before filing a lawsuit against the borrower. This is known as a condition precedent and the debt collector must prove this aspect of their case if it is brought up at trial. Under the law, debt collectors must notify borrowers as soon as it is practical after they have purchased the debt.

Before the debt collector can take any legal action, they must notify the borrower at least 30 days before attempting to collect the debt through legal action. If the debt collector cannot prove this element of their case, it will likely be dismissed.

Counterclaims

The Fair Debt Collection Practices Act (FDCPA) outlines many rules and laws debt collectors must follow. These include prohibiting threats of violence, harassing borrowers with numerous calls for collection attempts, and other unfair or devious collection practices. When debt collectors violate these laws, borrowers can file a counterclaim against them to sue for damages. A counterclaim will not only help borrowers recover compensation for losses they sustained but can also serve as a defense in a debt lawsuit.

Other Defenses in Debt Collection Lawsuits

The FDCPA only applies to third-party debt collectors, and it is typically not difficult for credit card companies and original creditors to prove that they have standing. However, there are still defenses that can be used in a lawsuit filed by a creditor directly, or a debt collection company. The most common of these defenses are as follows:

• Consent orders: Consent orders in debt collection lawsuits are agreements between the creditor or debt collector and government agencies, such as the Federal Deposit Insurance Company or the Consumer Financial Protection Bureau. The government agencies’ creditors have an agreement to expose violations of different consumer protection laws. For example, American Express agreed to stop collection efforts immediately until they could show, at the bare minimum, the consumer agreements.
• Inconsistent statements: In a credit card lawsuit, the statements are the main forms of evidence. A debt defense lawyer can review the statements from the credit card company and detect inconsistent interest rates and the fees charged as a penalty for late payments and more. When a creditor is inconsistent, it can provide a defense in a debt collection lawsuit.
• Amendments to the contract: When a borrower takes out a credit card, they sign an agreement between them and the creditor. After the original account was opened, however, amendments are sometimes made to it, which may change the interest rate, over-limit fees, and fees for late payments. Like when the credit card statements are inconsistent, any time a creditor fails to adhere to the amendments of a certain contract, it can serve as a defense in a lawsuit.
• Payment plans: Working out a payment plan with a creditor is the best way to avoid a lawsuit, rather than defend against one. Many creditors do not want to take on the hassle of a lawsuit and so, they are often happy to work out a payment plan.

Our Debt Defense Lawyers in Fort Lauderdale Can Help with Your Case

If a creditor or debt collector has taken legal action against you, our South Florida debt relief attorneys at Loan Lawyers can advise on your case. Call us today at 954-807-1361 or contact us online to schedule a free consultation.