If you’ve missed credit card payments or defaulted on a loan, the creditor will try to collect the debt through various methods. But if they’re unsuccessful, they may file a lawsuit against you in an attempt to collect the debt by obtaining a court judgment. If that’s happened, you might be wondering how to get a debt lawsuit dismissed.
Whether or not the debt collection lawsuit is legitimate, it’s possible to get it dismissed. Here’s what you should know.
What Happens if You Get Sued for Credit Card Debt?
When you’re significantly delinquent on a debt (typically 180 days past due), the credit card company or collection agency can sue you. The creditor files a complaint with a state civil court and lists you as the defendant. The complaint states why you’re being sued and what the creditor wants; that’s usually the money owed, plus interest. Sometimes, it also includes attorney fees and court costs.
If you respond to the credit card lawsuit, there could be a hearing in court. You and the creditor can then argue your cases. If the creditor wins the lawsuit, the court will enter a judgment against you for the amount of the debt. The creditor can then take more aggressive steps to collect the debt, such as garnishing your wages, seizing assets, or freezing your bank account.
Reasons to Challenge a Debt Lawsuit
Of course, no one wants to lose a debt lawsuit and get a judgment against them. But there may also be situations where you should attempt to get the lawsuit dismissed. Some common reasons include:
- You don’t actually owe the debt. Sometimes, the wrong person can be sued for a debt. This might happen if two people have very similar names or in cases of fraud.
- You already paid the debt. Debt collection agencies are sometimes given incorrect payment records from the original creditor. You could be sued for a debt that you have already paid.
- The amount of debt is wrong. Even if you legitimately owe the unpaid debt, the credit card company may sue for the incorrect debt amount.
- The statute of limitations has passed. The statute of limitations is the length of time that a debt can legally be collected. After this period, the debt becomes time-barred, and you can no longer be sued. Statutes of limitation vary according to state law but are typically 3-6 years. (New York statute of limitations has recently changed.)
How to Get a Credit Card Debt Lawsuit Dismissed
If you want to get a debt lawsuit dismissed, follow these steps.
1. Respond to the Lawsuit
You will have a deadline to respond to the lawsuit once you are served the complaint letter and court summons. Typically, this is between 20 to 30 days, depending on your state and how you were served the papers. It’s important to respond to the lawsuit promptly, even if you believe the allegations are false or you cannot pay the full amount.
If you don’t respond, the credit card company may be able to obtain a default judgment against you. They can collect the debt through wage garnishment, bank account levies, or other means. Simply put, ignoring a credit card lawsuit could mean you lose the case.
2. Collect Documentation
Next, you’ll need to gather documents that will be used in court for your case against the debt collector. For example, if you’re disputing the lawsuit, you’ll want to bring a debt validation letter detailing who the creditor is, the amount of the debt, etc., and why you are disputing it. You must have evidence — your recollection of paying a debt is not enough.
3. Hire a Lawyer
Next, it’s important to have an experienced debt relief lawyer on your side who can provide important legal advice. While you can represent yourself in court, an attorney will better understand debt collection laws, how to deal with the credit card company and their attorneys, and your options for resolving the debt.
You might be tempted to save money on legal fees, but hiring an attorney will often get you the best result and help you avoid losing the case because you did not understand the process in court. Most experienced debt relief attorneys offer free consultations so you can learn how they work and any potential solutions before hiring them.
4. Decide on a Plan
Finally, you’ll work with your attorney to develop a debt collection defense and the best plan of action for getting your debt lawsuit dismissed and the debt matter resolved. Some common options include:
File a motion to dismiss.
If you believe your creditor’s claims aren’t valid and the lawsuit shouldn’t proceed, you can file a motion to dismiss it. There are many reasons why a lawsuit can be dismissed. For instance, the case will be thrown out if your creditor can’t prove the debt is yours or if the statute of limitations has passed. Your lawyer can help you build a case and file for dismissal.
Offer a debt settlement.
Another way to get a debt lawsuit dismissed is by working out a settlement agreement outside of the courtroom. Remember, the creditor wants to get paid as much as possible. So, if you can present a satisfactory offer to them and works within your budget, you can avoid a lawsuit going further. If the creditor agrees to a settlement, and you pay based on the terms, the lawsuit will be dismissed.
Again, since you will likely sign a settlement agreement, it’s always advisable that an experienced debt settlement attorney review it. Or better yet, negotiate the terms for you so you are well protected. An experienced debt relief attorney can help you negotiate a settlement with your creditor. You might be able to pay a lump sum that is a fraction of the total amount owed or a monthly payment plan that allows you to pay off some of the debt over time.
Usually, creditors will only agree to a settlement if it’s clear that you don’t have the financial resources to pay the debt in full and that your offer to settle is reasonable and within their debt collection goals.
File a countersuit.
You may want to file a countersuit if you have a complaint against your creditor or lender. Once you have been served, you must file a response to the lawsuit (typically called an “answer”). In your answer, you can raise any defenses to the creditor’s claims and assert any counterclaims you have against the creditor. Counterclaims are essentially your own claims against the creditor that arose out of the same transaction or set of circumstances as the creditor’s claims against you.
For example, you could file a counterclaim if the creditor violated debt collection laws and your legal rights, such as those outlined by the Fair Debt Collection Practices Act (FDCPA). You’ll want to bring evidence if a debt collector violated your rights under state or federal law. For example, if a collector threatens you, misrepresents who they are, or makes phone calls to you outside the hours of 8 a.m. to 9 p.m., they are committing an FDCPA violation.
Our Experienced Debt Relief Attorneys Can Help
Tayne Law Group is a New York-based debt relief law firm that has been helping clients find resolutions for their credit card debt for over 20 years. If a creditor is suing you or think you will be, call us today to discuss how we may be able to help you put together a strategy to resolve your debt and avoid a lawsuit.
Give us a call at (866) 890-7337 for a free phone consultation with our experienced and helpful staff. You can also fill out our short contact form, and someone from the office will contact you. We never sell or share your information and all discussions are confidential. All work is done by our in-house team at the Tayne Law Group, P.C.
