Life is unpredictable, and numerous unforeseen circumstances can disrupt financial stability. For many people, this disruption often results in mounting debt.
In today’s financial landscape, consumer debt is more than just a headline; it’s a reality that many Americans face daily.
When debts go unpaid, people find themselves receiving constant calls, letters, or even legal action from lenders trying to recover what’s owed.
What most don’t realize is that they have rights and options when it comes to credit cards or other debt.
Whether it’s from medical bills, credit card payments, or student loans, debt has become a persistent issue affecting people from all walks of life.
It’s not just a financial burden, but also a source of immense stress and worry. When you’re drowning in debt, you’re not entirely powerless.
If you’re dealing with overwhelming debt, consulting a debt defense lawyer can offer you more than just peace of mind; it can be your pathway to financial stability.
Defining Debt Defense
Debt defense is a field of law that can provide you with viable options to protect yourself against unmanageable or unjust debts.
While taking on debt issues might seem daunting, knowing your rights and options can make a world of difference.
In the upcoming sections, we’ll delve deeper into debt defense, why it’s important, and how it works.
Debt defense is a legal strategy aimed at protecting consumers from unfair debt collection tactics and disputable debt claims.
In simple terms, it’s your legal shield when a creditor or debt collector pursues you for money you allegedly owe.
But debt defense is not a one-size-fits-all solution; it depends on the specifics of your situation.
Here are some scenarios where debt defense could come into play:
- Disputed debt amount. Sometimes, creditors and credit card companies claim more than what you owe. In such cases, debt defense allows you to contest the claimed amount.
- Questionable debt ownership. If a creditor can’t prove they own the debt they’re trying to collect, you may use debt defense to challenge their claim.
- Unethical collection practices: Collection agencies must follow certain laws and regulations when trying to collect a debt. If they don’t, you can raise a defense against them.
Why is Debt Collection Defense Important?
Henry Wheeler Shaw once said, “Debt is like any other trap. Easy enough to get into, but hard to get out of.”
Taking debt lightly is not an option. There are substantial financial repercussions to consider, such as decreasing credit scores and increasing interest rates.
In some cases, unresolved debt could even lead to legal action and you could be sued by a debt collector.
In addition to credit cards, debt defense covers various other forms like medical debts, business loans, and vehicle repossession.
If your vehicle has been repossessed or turned in, it’s not uncommon for the lender to try and recover the remaining loan balance.
The emotional and mental impact of carrying heavy debt should also not be underestimated.
It affects not only your peace of mind but also your ability to focus on other important aspects of life, such as your job or relationships.
What Are Some Defenses in Debt Collection?
The following are some common types of debt defense strategies.
- Contesting the debt amount. Under the Fair Debt Collection Practices Act (FDCPA), you have the right to request validation of the debt amount claimed.
- Questioning the legality of debt collection methods: Creditors and debt collectors must adhere to state and federal laws when collecting debts.
- Statute of limitations: Each state has its own statute of limitations for how long a debt is collectible. If a debt is old enough, your creditors cannot sue you to recover it.
- Identity theft and fraud claims: If someone else used identity theft or fraud to accumulate the debt in question, you have a legal right to contest it.
Do Debt Collectors Usually Sue?
Initially, a lender might try to recover a debt by making phone calls and sending letters. However, if these efforts don’t lead to a resolution, the lender might decide to file a lawsuit.
When a debt collector files a lawsuit, and you don’t respond, they may obtain a default, which could lead to a default judgment.
With a judgment in hand, debt collectors gain the ability to take drastic actions like wage garnishment, forced sale of assets, or even emptying your bank account.
How to Use Defenses in a Debt Collection Lawsuit
If you can’t settle the debt outside of court, you’ll go through the litigation process, which could result in a judge’s ruling.
Being served with a debt collection lawsuit can intimidate you, but understanding the legal process can help you navigate it more confidently.
Here are the general steps:
- Initial complaint and summons. These are documents putting you on notice that someone has sued you and that you must appear in court. This is an opportunity to consult a debt collection defense lawyer about your rights, defenses, and next steps.
- Responding to the complaint. You or an attorney need to respond within the timeframe indicated in the summons, usually between 20 and 30 days.
- The role of an attorney. While you can defend yourself in court, having an attorney will give you a better chance at a favorable outcome. Hiring an experienced lawyer who understands the complexities of debt laws, will help you provide a valid defense, and can guide you through the legal maze.
Do I Have to Appear in Court?
If you ignore the lawsuit or fail to hire a legal representative to appear for you, you’re almost guaranteed to have a default judgment entered against you.
Lawsuits can be dismissed for lack of service, but relying on this possibility is a risky strategy.
Lack of service refers to the failure of the suing party to properly notify you of the lawsuit.
While it may sound like a technicality that could work in your favor, you shouldn’t count on it.
Courts often grant extensions for service or grant alternatives to being served physically. This may leave you with a default judgment if you haven’t taken proactive steps.
Therefore, it’s strongly advisable to consult a debt defense attorney to explore all your options and develop a well-planned legal strategy.
Even if you do owe the debt, don’t assume you’re without rights. The burden of proof is on the creditor to prove the debt is yours and prove the amount owed. Many times, debt collectors fail to meet this burden.
What is Wage Garnishment?
Wage garnishment is an option only after a judgment has been secured. A significant portion of your earnings could be at risk with wage garnishments, as they can be as much as 25 percent of your gross wages. Federal student loans are an exception, allowing garnishment without a prior judgment.
Statute of Limitations: Know the Time Limits
The statute of limitations for written agreements, such as credit card contracts, personal loans, and secured loans, varies from state to state.
This doesn’t mean the debt vanishes after this period, it only restricts the creditor’s ability to file a new lawsuit.
If a debt collector tries to collect on an old debt and fails to disclose the ineligibility for legal action, you may sue the debt collector for this deception.
The Problem with Payment Plans
One common misconception is that setting up a payment plan is always the best first step. This is not necessarily the case.
Sometimes, agreeing to a payment plan can renew the statute of limitations on a debt that may have otherwise been too old to collect on.
Consulting with an attorney can provide you with a broader picture, including an overview of all your debts and possible courses of action.
DIY vs. Hiring a Debt Collection Defense Attorney
You might wonder if tackling debt defense on your own is a good idea. The risks often outweigh the benefits.
A single mistake in a complex legal procedure could cost you the case. Conversely, having an attorney by your side ensures that you’re leveraging knowledgeable guidance, thereby increasing your chances of a better outcome.
Understanding debt defense law is your first step toward achieving financial stability. If you find yourself in the crosshairs of a debt collector, don’t hesitate to seek legal advice.
Consult a debt defense lawyer to guide you through your options and help you make informed decisions.
Contact a Debt Collection Defense Lawyer Near You
Reaching out to an experienced debt defense law firm
If you’re overwhelmed by debt and facing challenges from debt collectors, a great first step is to seek guidance from a knowledgeable consumer debt defense attorney for advice tailored to your unique situation.
Speaking with a consumer protection attorney can offer you important insights into the most effective path forward.
Kazerouni Law Group extends complimentary initial case evaluations, giving you a no-obligation chance to discuss your options.
Because debt defense laws are intricate and can differ based on state regulations and personal scenarios, it’s essential to obtain individualized counsel from a qualified professional.
Reach out to us at (949) 612-9999 or get in touch with an attorney online for your complimentary consultation to discover how we can assist you.