Following up his excellent 2011 article on robo-signing in small-claims court, Peter Holland just wrote a quick-and-dirty guide to defending a debt collection lawsuit. In it, he summarizes the factual, procedural, and evidentiary problems debt collectors face in court, which we have been writing about here for years.
The article is meant as a guide for lawyers, because putting Holland’s strategies to work in court requires some decent legal research skills along with the ability to assemble a coherent legal argument and defend it in court. (I wrote a similar article for the William Mitchell Law Review back in 2009, complete with citations, but it only works for Minnesota cases.) But ambitious pro se defendants will find a lot of useful information in Holland’s article, too.
For more on defending debt collection lawsuits, see our Debt Collection Help resource page.
In order to administer any kind of justice, our court system requires two parties participating in a lawsuit. When that doesn’t happen, plaintiffs generally prevail, even if they haven’t produced any proof of their claims. Ordinarily, a default is a bad thing for a plaintiff, because there is little or no chance of getting paid.
Defaults are just what debt buyers want, though, because they have thousands of lawsuits to file and little or no proof in any of them. And debt buyers are willing and able to pursue collections on a massive scale—garnishing salaries and bank accounts to satisfy all those default judgments. Essentially, the debt buyer industry has found a loophole in the court system—a way to exploit the default rules.
That’s why courts need to raise the bar for debt buyers. When the usual result of a debt buyer lawsuit is a deprivation of property, courts should endeavor to make sure it doesn’t happen unless the debt buyer has shown some right to that property.
The Maryland Court of Appeals recently decided just that. Since last week, debt buyers must show actual proof that the defendant owes the debt and that the debt buyer has actually purchased the debt. The court also made it clear that it does not trust the robo-signed affidavits that debt buyers routinely attach to their lawsuits.
It’s a step in the right direction, and I hope more states will follow suit.
Randall Ryder is a consumer rights attorney in Minnesota. I am especially pleased to welcome Randall to the Caveat Emptor directory because I have worked with him extensively, and I know him to be an excellent lawyer and consumer advocate.
Randall is an even-tempered but aggressive consumer advocate who gets great results for his clients. He sues debt collectors and defenses people who are sued by debt collectors in Minnesota. He takes cases on contingency and uses innovative unbundled services arrangements to get clients the help they need without breaking the budget.
If you are dealing with debt collection abuse or a debt collection lawsuit in Minnesota, contact consumer rights lawyer Randall Ryder.
Consumer attorney Nick Slade has joined the Caveat Emptor blog as a contributing editor. Nick has been taking consumer cases since 2000, when he refocused his practice from criminal defense to consumer law.
Nick deals with a variety of consumer issues, including auto fraud, equity stripping (also called foreclosure rescue scams), predatory lending, the Truth-In-Lending Act, payday lending, debt collection defense and the Fair Debt Collection Practices Act, and more.
Nick is a great resource on consumer issues, and I look forward to his contributions to Caveat Emptor.
When you are sued, you get a summons and a complaint. The complaint lays out the causes of action–in the case of debt collection, the reasons why the debt collector things you owe them money. One of the causes (usually referred to as “counts” in the complaint) you will often see is “account stated” together with a statement that an account “has become stated between the parties.”