Bankruptcy Attorney | What To Do If You Are Sued In Small Claims Court Pt. 2

Bankruptcy Attorney | What To Do If You Are Sued In Small Claims Court Pt. 2

Bankruptcy Attorney | Find Out Who Filed the Lawsuit

Was the lawsuit filed by the original creditor or a third-party debt collector? If it’s a third-party debt collector, they’ll need to have proof that they now own the debt. If it’s the original creditor and you’ve received notices from a collection agency, that collection agency may now own the debt which bars the original creditor from collecting it.

Find Out If They Have Proof of the Debt

In addition to proof of ownership, the creditor will need to be able to prove that you owed the debt to begin with. Such proof includes the original contract or credit card agreement, relevant transaction information, and documents with your signature. Many debt collectors use a practice called robosigning where they submit signed statements to the court claiming to have the required proof of the debt when they don’t. If they can’t actually prove the debt, they can’t win at trial.

Read Your Original Contract

You’re looking for a few things in the original contract:

-What court can the creditor sue in?

-What is the interest rate?

-What are the late fees?

-Does the contract call for you to pay collection costs or attorney’s fees?

-Which state’s law applies?

You may often be sued in the wrong court or for an amount greater than allowed by the contract. If this is the case, you still need to respond to the summons but now have a strong defense.

Find Out the Applicable Laws

The laws that apply will be either your state’s laws or the state specified by the contract plus federal laws including the Fair Debt Collection Practices Act. One of the most important things to find out is the statute of limitations — if a creditor waits too long to sue you, you can move for their case to be dismissed. There are also often limits on interest rates, fees, and collection costs even if you signed a contract calling for larger amounts than allowed by law. The more you know, the stronger your position will be because you’ll know exactly what the creditor can or cannot do.