Understanding Debt Collection Lawsuits

Despite the improvement in the economy, creditors are still filing a high number of debt collection lawsuits against New York consumers. Unfortunately, many consumers do not oppose and answer debt collection lawsuits and their creditors are able to obtain default judgments against them. Once obtained, a judgment can be used to freeze a bank account, garnish wages and place a lien against a house.

When faced with a collection lawsuit, a debtor should promptly consult with an attorney to find out his or her legal options. There may be a strong legal basis to oppose a collection lawsuit. Some of these may include:

  • Expired statute of limitations: Often credit companies and debt buyers wait too long to file their lawsuit. In New York, this period is six years from the last payment made by the consumer. A lawsuit filed after the statute of limitations has run also violates the Fair Debt Collection Practices Act (FDCPA).
  • Lack of standing: In this scenario, the creditor can’t prove that they are owed the money or own the subject debt or simply lacks the documentation that it has the right to sue.
  • Failure to credit payment: The creditor fails to properly credit the consumer’s account for payments made.
  • Improper service: The credit card company fails to properly serve you with the summons and complaint. If you never received notice of the case, you may have a defense based on lack of proper service or lack of “personal jurisdiction.” Some creditors, debt buyers and collection lawyers use questionable and unethical process servers that claim they served a debtor when in fact they did not. As a result, the defendant ends up with an almost automatic default judgment against them. In this scenario, a debtor should make an application with the court to vacate the judgment and challenge the collection lawsuit. It should be noted that recent New York court rules will make it more difficult for creditors to obtain default judgments on this basis and will require that creditors show more diligence with their process service
  • Suing the wrong person: The credit card company sues the wrong person for the outstanding debt. This can be a problem when you have a common name.

If you have unpaid debts, credit card debt, cell phone bills, cable bills, medical bills, pay day loans, car loan deficiencies, etc., you may at some point get sued by the creditor or more likely by a debt collector like Forster & Garbus, Midland Funding LLC, Portfolio Recovery Associates LLC, or Asset Acceptance LLC, among others. You should consult an attorney if you find yourself sued by a creditor or one of their debt collectors. Do not ignore a summons and complaint. Your wages may be garnished or your bank account frozen or restrained if they get a judgment against you.

The Law Offices of David I. Pankin can help you answer the debt collection lawsuit against you. They will identify your defenses and, in some cases, counterclaims you can bring against the debt collectors. If you do not want to fight the lawsuit in court, they can negotiate with the attorneys who filed the lawsuit against you. Finally, if negotiation is ineffective, they can explore using a bankruptcy to wipe out the debt and give you a fresh start. The debt collectors have attorneys working for them, shouldn’t you have an attorney on your side?

The Law Offices of David I. Pankin, P.C. has 20 years of experience in helping consumers deal with debt collection lawsuits brought by creditors and debt collectors. The sooner you get help in defending a lawsuit filed against you, the better off you will be in the long run. To schedule a free initial consultation contact the Law Offices of David I. Pankin, P.C. today at 888-529-9600 or by using the form on the side of the page