Good debt collection defenses flow from the specific circumstances of the debt. Bad debt collection defenses merely delay the lawsuit without changing its outcome. And the worst debt collection defenses are irrelevant, waste the court’s time, and possibly add costs and fees to your balance. Here are the Top 5 Worst Debt Collection Defenses.
I Can’t Afford to Pay
Judges just don’t want to hear it. Your inability to pay a debt does not mean that you do not owe the debt. Insufficient income only becomes relevant during subsequent garnishment or attachment proceedings. In a debt collection lawsuit, the court wants to hear evidence relevant only to two things only: the existence of the debt and your legal liability to pay for it.
The Creditor Has No Legal Standing
Only in very specific (and usually obvious) cases does this defense work. While a debt buyer must prove that it legally owns your debt, in my experience, the plaintiff can do this in over 99% of cases. In the small percentage of cases where fraud may exist, payment of the debt to a third party may constitute a complete bar to collection by the true owner.
I Didn’t Receive Notice
The judge will ask you, point-blank, “Then how did you know to respond?” Insufficient service is an excellent defense tactic to gain some time to respond to pleadings. But actual notice is legal notice, and this defense will not end the lawsuit. Do not accept a default judgment while telling yourself that you can claim later that you did not receive sufficient service.
My Cosigner Said He (or She) Would Pay
Be wary of verbal agreements with friends or members of your family to pay on cosigned debts. If the creditor has gone through the trouble of obtaining your signature on a loan, you owe that debt. If your cosigner vanishes, or simply isn’t able to pay, the creditor will pursue you. Your verbal agreement (or even a written agreement) with the primary borrower does not impact at all your relationship as a cosigner to the creditor.
My Divorce Decree Says I Don’t Have to Pay
A divorce decree legally changes the relationship between two married persons. But it does not change the relationship between those two individual people and their creditors. It is for this very reason that the negotiation of secured and unsecured debts are handled very differently in a divorce. A debt collector can still sue you despite what your divorce decree says.