I recently came across an article here that confirmed what I already knew, most credit card lawsuits can’t prove the borrower owes them money. Many of the people that I receive phone calls from request assistance with debt settlement or filing bankruptcy. These individuals are often involved in civil lawsuits involving many of the most popular credit card companies or companies who have bought the debt or are collecting on behalf of the credit card companies.
The easy fix is for the borrower to file for bankruptcy if it makes sense and the borrower has significant debt and will be able to retain all of their property. In some situations however, the borrower is not a good candidate for bankruptcy for various reasons or they adamantly dispute the debt in question. In the cases where the borrower does not believe they owe the debt or they feel like the debt should be owed by a business they once owned only etc. they may want to consider fighting the debt in court. You see, according to the judge listed in the article above, 90% of the time, a credit card company or their debt collector cannot prove that you are the person who owes the debt. My personal opinion would be that it would depend on who is collecting on the debt. If it is your original creditor collecting on the debt, it is much more likely that they will be able to find the original contract that you signed and produce billing statements etc. If however another company has purchased your debt, it is equally as likely the original contract and statements will not be able to be produced because the collection company does not have access to those resources. In order for a company to win on a lawsuit, they must prove that you owe the debt, and without the original contract signed by you and no other evidence, they will not be able to prove their case.
I have actually been involved in these types of lawsuits, sometimes to buy a debtor time to file bankruptcy and on occasion involving somebody who does not believe they owe a particular debt. In the latter types of cases I have found that the banks or their collectors/law firms (Machol Johannes, Suttell Hammer and White, Mandarich Law Group, Gordon Ayleworth & Tami etc.), will take the case all the way up until the eve of trial to see if you will cave in and settle, even if they have no evidence! I have actually been through a mediation and the day before trial before a law firm decided to dismiss their case with prejudice. If you do get the bank to dismiss their case, do it “with prejudice” as that means the bank cannot bring the lawsuit against you again. I am confidant that if I took the case to trial I would have won and made the bank pay my attorney fees, however the client wanted to settle and ensure this particular creditor would not bother them again.
If you are faced with a debt collection lawsuit, you should always ask for verification from the company trying to collect on the debt. If they can’t produce the original agreement and only produce some transfer of debt doc, that is not good evidence that you actually owe the debt. Also keep in mind, that in Washington the statute of limitations to collect on credit card debts is six years. Some companies buy junk debts and file lawsuits, hoping that the lawsuit will go uncontested and they will get a default judgment. Therefore if you get served with a summons and complaint you should always respond with an answer to avoid a default judgment. If you happen to file bankruptcy prior 20 days after your lawsuit has been served, then you don’t need to file an answer and your lawsuit will be dismissed without the credit card company winning a default judgment.