Should I Hire a Debt Defense Attorney If a Creditor Sues Me?

Suppose a creditor files a lawsuit against you. In that case, your decision to retain a lawyer in defense against the complaint depends on the ability of the debt collector to show that it can prove its claim against you, how much it will cost to defend the lawsuit, and if the creditor will be able to collect money from you.

Think about the when deciding whether to engage legal counsel to defend you against a creditor’s lawsuit

Your Choices for Dealing with a Lawsuit

When a creditor sues you to collect a debt, you have a few options in dealing with the complaint:

• Not answer the lawsuit and allow the creditor to obtain a default judgment against you;
• Defend the case yourself; or
• Hire an experienced debt defense attorney to represent you in the lawsuit.

Which option is best for you will vary depending on several factors:

• Do you owe the money?

If you owe the money that the debt collector or creditor is seeking in its lawsuit, hiring a debt defense lawyer can help you negotiate a better settlement.

• Do You Have a Legal Defense or Counterclaim to the Complaint?

Hiring a debt defense lawyer to represent you in court makes sense if you have a valid defense to the lawsuit or a valid counterclaim.

Hiring a debt defense lawyer will ensure that you have the best information available to defend the suit and may save you money in the long run.

What Is a Legal Defense to a Creditor’s Lawsuit?

Generally, a legal defense is a reason why the plaintiff’s action should not be successful. In terms of a debt collection case, it is the reason why the plaintiff failed to prove its case or why you do not owe the money.

Here are some of the most common defenses against lawsuits brought by creditors:

• The statute of limitations [the period during which the creditor is allowed to initiate the suit] has expired;
• The creditor filed the claim with the wrong court; or
• The creditor cannot provide the original documents to prove that you owe the debt;
• It is not your debt; you are the victim of identity theft; the debt collector could be trying to convince you to settle a family member’s debt; or an account for a business that you are not legally obliged to pay;
• You have already paid the debt;
• The debt was a part of your bankruptcy;
• The creditor forgave a portion of the debt in exchange for a specific payment; or
• The amount is incorrect.

What is NOT a valid defense?

• The reason you are behind on your payments;
• The reason you cannot pay it off today;
• The debt collector or creditor was not willing to negotiate reasonable arrangements for payment;
• A request to settle the matter or enter into a payment agreement.

What is a Counterclaim?

A counterclaim is a claim for damages filed against an opposing party after the original claim was filed.

Filing a counterclaim might also persuade the creditor to dismiss the lawsuit.

What Is the Cost of Retaining a Lawyer vs. the Amount of the Debt?

Although you may have a valid defense to the lawsuit, you will want to consider the cost of hiring an attorney. Attorney’s fees can add up quickly.

After the judgment is entered, post-judgment interest will accrue over the judgment amount until the judgment is satisfied. You may be liable for a sum that is hundreds or even thousands of dollars more than the initial debt, so it could be worthwhile to hire an attorney to help settle the debt for an acceptable amount.

Schedule A Free Consultation

Contact Diwan Law to receive a no-cost consultation if you are unsure about your legal rights.  As an experienced debt defense lawyer, Diwan Law can assist you in evaluating the creditor’s claim and your circumstances to determine the most appropriate course for you.