Sued? Fear Not!

Often, the final trigger leading a client to call me is getting suedfor a credit card. Fear !! Scarlet Letters!! Branded For Life!!  The suit can be a good thing.  You have defenses, and now you start planning for your financial fresh start instead of being hunkered down in your sweat box.  Even though there’s not enough money for a bankruptcy filing just yet.

Yeah. I’m a lawyer. I’m in court every day, so I don’t get scared. But you do.

Earlier I wrote about defenses when sued by debt buyers. They cannot prove that they own the debt. No witnesses, and incomplete records.

The same thing happens with credit card issuers. They get a lawyer to sue in small claims court ($7,500 maximum here in Massachusetts). The defendant – you? – doesn’t show up, and a default judgment issues.

Or you show up. The magistrate asks if you owe the money. You say “yes” because you just don’t know what else to say. Judgment enters.

It doesn’t have to be this way. Here’s how to buy some time and save up for a bankruptcy filing to get rid of all your credit card debt. (That’s your goal, remember?)

1. You show up. You’re asked, “do you owe the money?” You truthfully say, “I don’t know. I made some charges. I made some payments. I haven’t added up the charges and I haven’t subtracted the payments. I didn’t calculate the interest. The late charges and over-limit fees don’t look right.” The credit card plaintiff has the burden of proof and it can’t do it. From what I see, only the creditor’s lawyer is ever in court and he surely cannot testify. Even if the creditor sends someone, they won’t be a proper record keeper and should not be permitted to testify. (A proper record keeper has first hand knowledge of the record keeping system, something more than “I did a screen printout and here I am”.)

2. You hire an attorney for short dollars. She goes to the hearing. Now, you’re not even there to say that you might owe something even though you don’t know how much. No one is there to testify. Case dismissed. Or if the credit card plaintiff actually has someone there, your attorney cross-examines about the inability to testify on the record-keeping procedures. Same result.

3. You counterclaim. The credit card debt was securitized and the trust should be suing, not the credit card company. Fraud on the Court/Unfair or Deceptive Trade Practice!! The credit card falsely stated that the debt was owed to it instead of the securitized trust. Unfair Debt Collection/Unfair or Deceptive Trade Practice!! Money in your pocket, and a payment for that bankruptcy fee.

Picture courtesy of USA