How Not to Defend a Debt Collection Lawsuit

This article is a list of defenses that do not work. If you would rather find out what you should do, click over to “Served By a Debt Collector? What To Do Next.”

Most debt collection lawsuits are handled by overworked and unsympathetic debt collection attorneys. With that in mind, focus on your best defenses to the lawsuit. Here are some of the weaker defenses, which you should avoid.

There Is No Signed Contract

Creditors are not always required to produce a signed contract to prevail in court.

There are other legal claims—such as account stated—that may allow a creditor to win without a producing a contract. An account becomes “stated” if the creditor sent you invoices (credit card statements) and you made payments after receiving them. In other words, if the creditor can produce proof you made a payment, it can establish an account stated.

Basically, by making a payment, you acknowledge the existence and amount of the debt.

In addition, if you admit certain allegations in a complaint, you may have let the creditor off the hook for producing a signed contract. For example, if you file an answer in which you admit you opened an account ending in 1234, the contract might not be essential to the creditor’s claims. The contract may not be totally irrelevant, but it may not be essential for the creditor to win, either.

Last, don’t forget that a judge is ultimately going decide whether a signed contract is important. They might decide it isn’t.

I Tried to Pay but You Wouldn’t Work with Me

The court’s job is to decide whether you are legally obligated to pay a debt to a creditor. The court does not care whether you tried to work out a payment plan. It is beside the point. (If anything, your willingness to pay is pretty good evidence that you do owe the debt.)

Of course, a judge may be sympathetic to your financial situation. A judge could even suggest that a creditor should agree to a reasonable payment plan. But judges don’t have the power to force a creditor to accept a payment plan. It is frustrating when a debt collector won’t work with you, but they don’t have to.

Along the same lines, it doesn’t matter if you are “judgment proof.” The creditor may never be able to collect anything from you, but it can still win its lawsuit.

Bottom line: attempting to work out a payment plan, or being unable to make payments, is not a defense.

I Never Had an Account with You

If you never had an account with the original creditor—Chase Bank, for example—you might have a very strong defense. If you mean you never had an account with the plaintiff, which is a debt buyer—Midland Funding, for example—you could still owe the debt for any number of reasons.

If you are being sued by a debt buyer or debt collector, it may just be collecting on the original account. It may not even have bothered to give the account a different account number.

It is important to understand the difference between not having an account with the plaintiff and not not having an account at all. In order to win, the creditor will have to show a chain of title—how it came to own the right to sue you on the original account. If the creditor cannot prove it has the right to sue you, that is a big problem and good defense. But simply asserting “I never had an account with this company” probably will not get you very far.

My Divorce Decree Says I Don’t Have to Pay

Even if you have a court order that says your ex-spouse is responsible for the debt, you can still be sued for it. Your divorce decree is between you and your ex-spouse. A debt collection lawsuit is between you and a creditor. Those are two completely different contracts.

The creditor was not part of your divorce—that was between you and your ex. That means the divorce decree is not binding on the creditor. Divorce courts don’t have the power to modify contracts between you and a third-party creditor.

However, you might be able to sue your ex-spouse or add them to the lawsuit. If a creditor comes after you for a debt that your ex-spouse is supposed to pay, you can try to enforce the divorce decree and against your ex-spouse. Or if your ex-spouse is a co-signer on the alleged debt, you could potentially drag them into the debt collection lawsuit.

Originally published 2010-12-01. Last updated 2017-01-05.