At a time when so many businesses have ground to a halt due to COVID-19, you can expect mounds of debt and a plethora of debt collectors looking to get paid when all of it is “over”. We all know that it will be some time before the economy fully recovers from the pandemic – if it ever does. Yet, that won’t stop companies like Capital One and others from continuing their practice of regularly taking their customers to court.
Trust me, Capital One and Other Debt Collectors Are Still Coming for Millions of Americans in the near future. So if you owe, or even if you don’t, be ready when they come calling. When you get a summons telling you that a debt collector is suing you, don’t give up or ignore the paperwork. Fight back. You may find it’s well worth it. I’ll use a scenario to show you why.
Credit Cards R Us v. Sarita (This is not a real case)
Sarita is a physical therapist. She was laid off in late May 2019 and could barely pay her bills. Prioritizing condo payments and car notes, she didn’t pay any other bills. After taking harassing phone calls from other creditors, she gave up trying to talk to them. She ignored their bills.
Luckily, Sarita found another job in July 2019, but by the time she started working, she had mounds of debt and was in danger of losing her home. She reached out to her mortgage lender and slowly began to catch up. In late-January of 2020, she contacted her other creditors and promised them payment in tiny installments over a set number of months starting in March. On March 13, days before she was to make her first payment, she was laid off due to COVID-19. On July 14, 2020, she was sued on behalf of a credit card company.
What Options Does a Debtor Have?
You may be able to work things out when you’re sued. Contact the creditor and try it. Then again, they may want to tag on other fees for making them take you to court in the first place. You might end up owing them more money. So, being proactive and fighting within the court system might make more sense, especially if you’re in no better financial shape after they sue you than you were before. So, what are your options?
To defend yourself, you can essentially say, (1) I don’t owe you or you’re not owed the money; (2) you can’t prove I owe you; (3) it wasn’t me; and (4) you suck. Of course, you wouldn’t say all this flat out. You’d say it in legalese, and from a defendant’s point of view, the best instruments for that legalese are affirmative defenses. An affirmative defense says that even if everything the plaintiff says is true, the defendant is not liable for payment (or full payment), damages, or injuries.
Affirmative Defenses in a Debt Collection Case
One of the best things about affirmative defenses is that debt cases don’t get far if the defendant has a slew of them and knows how to use them properly. Credit card companies and banks rarely have the stomach for long litigation. Yet, having the burden of proof, they must prove their allegations first. So make them do that.
So, Sarita wants to fight back. Her affirmative defenses are her biggest bow and arrow. She can turn the case back on her opponents and say, I don’t owe you, you can’t prove I owe you, it wasn’t me, and or you suck. Below are some suggestions.
Affirmative Defenses for “I don’t owe you (You’re not owed the money).”
Affirmative Defense – Violation of a Statute
Sarita can allege that the plaintiff or the plaintiff’s agents intentionally violated the law by making harassing calls in an attempt to collect a debt. If she can prove this, the plaintiff would have to pay up to $1000 for each violation. This would offset any amount Sarita owes. So, effectively, she doesn’t owe them jack. This goes for many other statutes.
Affirmative Defense – Unjust Enrichment
If the relief demanded by the card company would result in the company receiving more compensation than it’s entitled to, Sarita can say she shouldn’t have to pay, or she should have to pay a lesser amount. This might happen where a company tacks on fines and fees that are unwarranted.
Affirmative Defense – Bankruptcy
If Sarita, or any defendant, asserts that a bankruptcy discharge against a credit card company excused her from having to pay a debt, the card company will have to leave them alone. They are not owed money.
Affirmative Defenses for “You can’t prove I owe you.”
Affirmative Defense – Laches
Sarita can allege that the card company waited so long to file the lawsuit that evidence or witnesses necessary for her defense was unavailable. If Sarita can’t prove her innocence, the plaintiff is not allowed to prove anything either. Sarita might lose this one because of the date of the suit, but it’s up to the plaintiff to strike it.
Affirmative Defense – Failure to Join Indispensable party
Sarita can assert that a party necessary to render a judgment in the case is missing. For instance, if the card company sold the debt, and no one at the card company who had contact with Sarita is a party, a huge piece of evidence is missing. The card company may not be able to prove its case.
Affirmative Defense – Lack of Standing
Sarita can allege that the debt collector, who might even be the attorney filing the suit, does not own the debt and that there is no business relationship between them. Thus, the card company will have to prove that there is a relationship before trying to prove Sarita owes them anything.
Affirmative Defense – Failure to State a Cause of Action
This is the claim most asserted in courts as an affirmative defense. In this assertion, Sarita can allege that the complaint does not state facts or statutes that support it.
Affirmative Defenses for “It wasn’t me.”
Affirmative Defense – Acts or Omissions of Nonparties
Sarita can allege that the plaintiff’s injuries were caused not by her but by third persons who are not parties to the lawsuit.
Affirmative Defense – Mistaken Identity
Sarita can assert mistaken identity in that the name, signature, address, social security number, or other important information on the complaint or loan papers is not hers. You’d be surprised at how many company records are inaccurate.
Affirmative Defense – Identity Theft
Sarita can allege that an unauthorized person used her identity to rack up the debts the plaintiff complains of.
Affirmative Defenses for “You suck.”
Affirmative Defense – Usury
Sarita can allege that the card company’s actions are precluded because the interest rate charged her for a loan back in 2009 was so high as to be usurious, and it violated state and federal laws.
Affirmative Defense – Unconscionability
Sarita can argue that she’d paid the card company on time for 11 years, and the company could have sued her in 2019, but it waited until the thick of the COVID-19 crisis, during a pandemic, to sue her. Given the extraordinary circumstances, the choice in dates was unconscionable. This may not be that strong, but Sarita can still argue it. The card company will have to hire a lawyer to strike it down.
Affirmative Defense –Illegality
Sarita might claim illegality if the plaintiff’s employee, a loan officer, heard her say she wanted to use the money to buy marijuana one week before marijuana became legal in her state, and the loan officer still signed the contract. The court will not enforce the contract because it was created for the purposes of performing an illegal act.
With affirmative defenses, it’s not what you can prove when you assert them but the actual facts you can allege to support them.
Being proactive and on the offense, even if you’re a defendant, can pay off big time in a lawsuit. So, when Capital One or one of the others comes for you, have your blades already sharpened. Do some research, and find the right set of affirmative defenses now, and make them pay for suing you.
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