Are you being sued over an alleged old debt you might not even remember by a company you definitely do not recognize by name? If so, there is a good possibility that this Plaintiff is what is also known as a debt buyer. A debt buyer is a company that does not sell goods, loan money, or does not do anything else really useful. They just buy up portfolios of charged-off credit card accounts and other old debts, frequently for pennies on the dollar, and attempt to collect. They will file lawsuits in court, often with little or no supporting documentation to prove up their case. However, if you do not protect yourself and answer the lawsuit, the debt buyer is automatically awarded the case, and you lose by a default judgment. If you try to represent yourself, you will be going against a lawyer on the other side that is well versed in litigation procedures and the various court formalities and deadlines that apply.
Here is a point to ponder. The State of Texas has a number of laws that help protect all consumers in lawsuits such as these. One such law is the requirement that all third party debt collectors post a $10,000 bond with the Secretary of State. If they have not done so they are barred from collecting, and subject to a counterclaim with statutory damages. Generally speaking, a third party “debt collector” is either an entity collecting on another entity’s behalf, or an entity that has acquired a debt after default (when you stop paying). This does not apply to original lenders such as Citibank, Discover, etc. That said, if you do not answer the lawsuit you will still be subject to a default judgment.
If you are being sued over a debt by a Plaintiff that you have never done business with, please do not hesitate to call me immediately. Please seek legal counsel anytime you are served, or suspect that you may have been served with legal process.
The better question is can you afford not to hire one. Credit card lawsuits are filed en masse by a handful of law firms across the state. I’ve personally reviewed court files and seen one attorney file over 20 cases in one day in the same Justice of the Peace Court. In the majority of debt buyer cases, and a pretty good percentage of original creditor cases, the creditors and their attorneys the lack the documentation to properly prove up their cases.
Debt litigation is a lot like a poker game. My job as a debt defense lawyer is to force the other side to show their cards. The creditors have the burden of proof to prove up each and every element of the cause of action they are seeking recovery for. While this may not sound that complex do you, do you think you can afford the risk of trying to do this all by yourself?
I recently took on a pro bono client from Legal Aid of Northwest Texas. She was considering filing for a Chapter 7 Bankruptcy. She was being sued by a 3rd party debt buyer claiming to be the assignee of a credit card account that she had defaulted on. After filing an answer and asking for some discovery, the debt buyer dropped their suit, and she elected not to file Bankruptcy. However, about a year before I met with her, she had tried to represent herself against a separate 3rd party debt buyer. She decided to take an agreed judgment and will be paying $150 to 200 per month for several years to come. While I cannot promise a particular result, I am fairly confident that I could have either gotten that case dismissed or negotiated to an amount quite a bit more reasonable. In addition, she paid for her own pre-filing Bankruptcy class which I could have arranged for her to get at no charge. In short she lost money by not hiring an attorney sooner.
If you are indigent and cannot afford a lawyer, there are a number of services available, such as Legal Aid of Northwest Texas that may be able to find an attorney to handle your case pro bono. The Tarrant County Bar Association offers a legal line twice a month where you may call and ask questions of a local attorney who is volunteering his/her time. If you are a veteran, there is a group called the Texas Veterans Legal network that may be able to assist you. If you don’t hire me, get help somewhere. As I stated in my last blog entry, judgments don’t ever really go away.
Call me now for a free consultation.