8 of the Best Defenses to Creditor Lawsuits

If you’re faced with a lawsuit from one or more of your creditors, then you’ll want to mount the best possible defense. In this article, we’ll discuss what does not constitute a valid legal defense and 8 legally valid defenses that can help you win your case.

What is Not an Acceptable Legal Defense?

There are several reasons why you may have fallen behind on your bills. In many cases, you may have been only partially to blame, or circumstances beyond your control forced you to stop making payments. 

No matter how valid your reasons are, the following defenses will not help you to get out of a creditor lawsuit:

1. An explanation of why you defaulted on your debts, or why you are currently unable to pay off your debts.
2. A statement that you are willing to settle the case or develop a payment plan with the creditor.
3. An accusation that the creditor/debt collection agency refused to develop a reasonable payment plan before filing the lawsuit.

8 Valid Defenses Against Creditor Lawsuits

The following defenses can help you to have your creditor lawsuit dismissed. You’ll need to consult with your debt defense lawyer to see which ones may apply to your case, and how to select the right one.

1. Identity theft. If you’ve suffered from identity theft, then it’s likely that the debt you’ve accumulated is a result of fraudulent activity. If so, then you have a powerful defense against any lawsuit brought up by your creditors. Your creditors will have to prove that you authorized each transaction that caused you to incur debt.
2. Mistaken identity. Similar to identity theft, mistaken identity is when you’re held liable for someone else’s debt because they have a name or other identifying information that closely resembles yours. Again, you cannot be held liable for the debt in the case of mistaken identity.
3. Statute of limitations. If your creditors didn’t file a lawsuit against you within the legally established time limit (counting from when you last made a payment), then their case is not valid. In Texas, the statute of limitations is 4 years. Any lawsuit filed after that time can and should be quickly dismissed.
4. Previous payments made. If you did pay part (or all) of your debt, and yet were not credited for some (or all) of those payments, then you can point to the situation as a valid defense against a lawsuit. Keep in mind, the burden of proof is on you to prove that you did actually make those payments as you claim.
5. Authorized user. If you were an authorized user on someone else’s credit card but never became a cosigner (in other words, never agreed to share financial liability for the card), then you can use that fact to your advantage when faced with a lawsuit from the credit card company. Only if you signed an agreement to share responsibility for the credit card can you be held liable for any debt incurred.
6. Incorrect amount of debt. If you believe that the amount of the debt the plaintiff claims is incorrect, you have the right to dispute that amount. You can demand that the plaintiff produces evidence that the stated amount is correct, such as your original contract, billing statements, and so forth.
7. Lack of assignment. Some debt collection agencies are “debt buyers.” In other words, they buy the right to pursue payment of your debt from your original creditors. If you’re dealing with a lawsuit from a debt buyer, you can make them prove that they actually “own” your debt. If they can’t do so, then their lawsuit must be dismissed.
8. Bankruptcy. If you have been declared bankrupt, and the debt in question was part of the bankruptcy case, then your creditor cannot try to collect that debt from you ever again.

If you are facing a creditor lawsuit, speak to an experienced debt defense attorney at Warren & Migliaccio, L.L.P. today. Our team at Richardson or Dallas can help you to mount the best possible defense for your case.