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As if being in debt weren’t bad enough, facing a debt lawsuit can be a daunting experience. About 15% of Americans said they had been sued by a debt collector, according to a report by the Consumer Financial Protection Bureau. Thankfully, you have legal rights and options to defend yourself should you end up in this situation. In this blog, we’ll go over some of the most effective strategies to have your debt lawsuit dismissed.
Understanding the debt lawsuit process
Before diving into dismissal strategies, it’s crucial to grasp the basics of a debt lawsuit. Typically, the process involves:
- Debt collection efforts: Prior to a lawsuit, creditors or debt collection agencies attempt to collect the debt through letters and phone calls.
- Filing the lawsuit: If initial collection efforts fail, the creditor may file a lawsuit against you. You’ll receive a summons and a complaint outlining the creditor’s claims.
- Your response: You have a limited time to respond to the lawsuit (usually 20-30 days). Failing to respond can result in a default judgment against you.
- Discovery and negotiation: Both parties engage in a discovery process, where evidence is exchanged. Negotiation and settlement discussions may also occur.
- Court proceedings: If no settlement is reached, the case goes to court, where both sides present their arguments.
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Getting your debt lawsuit dismissed
Now, let’s go over some strategies for getting a debt lawsuit dismissed.
1. Validate the debt
Your first step is to ensure the debt is actually valid. Request debt validation from the creditor within 30 days of receiving the initial notice. According to the Fair Debt Collection Practices Act (FDCPA), creditors must provide detailed information about the debt, including its origin and ownership.
2. Check for statute of limitations
Each state has a statute of limitations that limits the time creditors are allowed to file a lawsuit. If the statute of limitations has expired, you can use this as a defense. Research your state’s laws or consult an attorney to determine if the debt is time-barred.
3. Lack of standing
Creditors must prove they have the legal right to collect the debt. Sometimes, debt is sold multiple times, and the current owner may not have the necessary documentation. Challenge the creditor’s standing if it’s unclear who owns the debt.
4. Errors in documentation
Carefully review all documentation provided by the creditor. Look for inaccuracies, missing signatures, or incomplete records. Errors in documentation can weaken the creditor’s case.
5. Settlement negotiations
Consider negotiating a settlement with the creditor. They may be open to a reduced payment or favorable terms. Be sure to have any settlement agreement in writing.
6. Counterclaims and defenses
Explore potential counterclaims against the creditor, such as violations of the FDCPA, unfair debt collection practices, or breaches of contract. Effective counterclaims can result in a favorable outcome.
7. Seek legal counsel
Consult with an attorney who specializes in debt-related legal matters. They can assess your case, provide guidance, and represent you in court if necessary. Yes, it will cost you money up front, but in the long run it could very well save you a lot more.
8. Mediation and arbitration
Some cases may benefit from mediation or arbitration. These alternative dispute resolution methods can help you reach a resolution without going to trial.
9. File a motion to dismiss
If any of the above methods proved you with strong legal grounds, your attorney can file a motion to dismiss the lawsuit. This asks the court to dismiss the case based on specific legal arguments.
10. Bankruptcy as a last resort
While not a dismissal strategy per se, bankruptcy can provide debt relief by discharging or reorganizing debts. Consult with a bankruptcy attorney to explore this option if all else fails.
Conclusion
Whether it’s challenging the validity of the debt, asserting a lack of standing, or seeking legal counsel, understanding your rights and the legal process is crucial when it comes to having a debt lawsuit dismissed. Let this blog serve as a starting point and consult with an attorney for personalized advice tailored to your specific situation. Always remember that your financial future can improve, and a debt lawsuit doesn’t have to be the end of the road.
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The information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
Debt solutions program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt solutions services in their state. JGW is licensed/registered to provide debt solutions services in states where licensing/registration is required. Debt solutions program results will vary by individual situation. As such, debt solutions services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt solutions services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment. JG Wentworth does not pay or assume any debts or provide legal, financial, tax advice, or credit repair services. You should consult with independent professionals for such advice or services. Please consult with a bankruptcy attorney for information on bankruptcy. Client Grievance Procedure: If you are unable to resolve an issue with your Debt Specialist or Client Services Representative, please request to speak with a manager. If you cannot reach a resolution with a manager, please escalate communication via email at [email protected] or direct mail to the business address listed on our contact page.