This article details some methods for avoiding payment on a legitimate debt (beating a debt) that I picked up from some sources on the internet. You’ll have to have some courage and confidence to actually go through with such an experiment. However, this method is the best way to avoid payment on the debt, or at least for paying the minimum amount possible. This article assumes that you legitimately owe this debt and have defaulted on payments. We’ll outline five steps for avoiding payment on the debt. See also, all of my articles on Collection Agencies.
** Disclaimer – Debtprison.net does not administer legal or financial advice. The contents of this website are my opinions on collection agencies and how to deal with them. Nothing on this website should be interpreted as legal advice or council. No opinions on this website should be used to replace the advice of your financial advisor or your legal council.
Request validation of the debt
Mailing out a debt validation letter (registered mail of course) simply means you are requesting for the collection agency to prove that they have any legal authority to collect on this debt and that you owe it. The Fair Debt Collection Practices Act doesn’t apply to original creditors such as Bank of America, Citibank, Capital one, and Discover Card. A validation letter is used when the original creditor has sold or assigned the debt to a collection agency. It is important that you make sure this collection agency has the legal right to collect this debt. If they can’t prove they possess the legal right then the debtor doesn’t pay. A debt validation letter will also buy you some time. The collection agency is not allowed to pursue the debt while it is being disputed.
Alright so let’s assume the collection agency validates the debt. Now you need to write another dispute letter. In this letter, you should declare that this debt is legally disputed, you do not owe the debt, and that you are now requesting for the collection agency to provide the original contract (signed by you) from the original creditor that proves you owe it. In addition, you are requiring a break down of the amount they claim you owe – including the original creditor default amount and the resulting interest and fees. If they fail to provide this information within 30 days you will consider their claim invalid.
If they send a response letter they will not provide the information you requested (at least I’ve never heard of any collector providing such a response). If so – write one final letter and explain that their claim is not valid and was evidenced by their inability to provide the information you requested and for them not to contact you again.
Now you can wait for a summons for civil court (there’s no guarantee they will pursue a civil judgment). In fact there’s a decent chance your debt will simply get sold to another collection agency and this process starts over. See also, How to avoid a lawsuit from a collection agency.
The Sworn Denial
If you receive a summons for civil suit it will say something like ‘we, the collection agency, are taking the debtor to court, and we swear that the amount of money we claim he owes is correct.’ This is called a sworn account or an affidavit of debt. Basically the company says “Yeah we promise that the dude owes us this amount of money.” Now you need to write up a letter of sworn denial, have it notarized, file it with the court, and send a copy to the collection agency.
For a good illustration explaining the necessity of the Sworn Denial click here.
This needs to be a statement in writing that you FILE with the court where you have been sued. It can be a simple statement, but it needs to be typed, signed, notarized, and filed with the clerk of the court and a copy sent to the collection lawyer. It needs to be a graduated denial. In other words, it needs to say, I deny this is my debt and if it is my debt, I deny that it is still a valid debt and if it is a valid debt, I deny the amount sued for is the correct amount.
When a sworn denial is filed, the debt collection attorney can not rely upon a sworn affidavit of account, but must instead produce a live witness to testify about the debt. The requirement of a live witness changes the dynamic of the collection action considerably. The likelihood that the action will go no further now increases again.
Request a Discovery
The next step is to request a Discovery. In law, discovery is the pre-trial phase in the lawsuit in which each party (YOU) through the law of civil procedure can request documents (copy of the contract or agreement upon which the debt is based) and other evidence from other parties or can compel the production of evidence. With the Discovery you are requesting the collection agency produce the paperwork which indicates that you owe this debt. This would include an original signed contract and an explanation of the dollar amount.
If the debt is a credit card debt, it is likely that the debt collection attorney will not be able to secure a copy of the original agreement or if he is, he will not be able to do so timely. Most credit card signature agreements are scanned or if older, microfilmed and stored away in electronic archives. If it is an old debt which has been sold to a debt purchaser the likelihood of retrieving the original signed agreement decreases dramatically. If you are being sued in a small claims type court where discovery is not permissible, ask for the agreement at trial.
Go to Court
From Debtcollectionlawyer.blogspot.com
The vast majority of debt collection suits proceed to default judgment because no one shows up to dispute them. Show up and ask for a trial. And remember, the worst thing that can happen is the same thing that would have happened if you hadn’t appeared at all, a judgment. You can’t make it worse. If the attorney doesn’t have his live witness available, oppose the case being continued. Tell the judge you’ve taken off work to be there and are ready to go forward. If the judge does continue the case to a new trial date, show up again.
You will need to educate yourself. You won’t be able to equip yourself to spar with an attorney, but knowing a little is better than knowing nothing. You will need to read the Rules of Procedure that govern the court and the Rules of Evidence for that jurisdiction. Look them up online. The Rules of Civil Procedure will govern how the trial is conducted. The Rules of Evidence will govern what the Judge is allowed to see and hear. If you do have a trial and the creditor produces a live witness, attack the witness first and the debt second. The witness can only testify from personal knowledge.
Generally, the witness has no personal knowledge about you or your account, but only knows what’s in the file he got from the collection department. If he is going to testify without personal knowledge, but from the records and documents of the business, then he has to have a basis to do so. He needs to be the regular keeper of those books and records and be familiar with how they are kept and their contents.
Don’t simply accept his answer when the debt collection lawyer asks him if he is the regular keeper of those books and records and be familiar with how they are kept and their contents and he says yes. Ask him how long he has been with the company, in that job, what he does on a daily basis, when he first saw your file, if he knows from personal knowledge if it’s a complete file, etc. You must destroy his credibility and ability to testify about the papers he has in front of him. If you can do that, then the debt collection attorney has no case. If the witness is actually a good witness and you can’t prevent him from testifying from your file, then you need to know your defenses to the debt.
The best defense is the Statute of Limitations. The Statute of Limitations is the time limit that an aggrieved party has in which to file a lawsuit. It is a drop dead deadline. Find out what your state is and whether the creditor is beyond that date. If they are, ask the court to dismiss the suit.
Appeal the Judgment
If you feel like the judgment wasn’t fair you have the right to appeal it. You should appeal the judgment immediately (ask the court for the exact amount of time). An appeal can take a long time to work its way through the system – months or years. The elapsed time is valuable and no collection action such as garnishments can occur while the appeal is pending (unless you live a jurisdiction that requires you post an appeal bond to stop collection during an appeal).
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Related Articles
* Will Debt Follow you Abroad?
* Restrictions on Wage Garnishment for Debt Collection.
* The Fair Debt Collection Practices Act
* Reasons not to file Bankruptcy or Settle Your Debts
* Can you go to jail for not paying your debts?
* How to settle your debts on your own
