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Defenses for a Debt Collection Lawsuit

Just because you get sued for a debt doesn’t necessarily mean you legally owe it. The news has been full of stories in recent years about creditors and collection agencies that have tried to collect debts from the wrong people, or debts that had been paid, or debts for which the time limit for collection had passed.

Creditors and debt collectors in general are becoming more aggressive about collecting debts, and about suing debtors when debts remain unpaid. In the past, it wasn’t uncommon for unpaid medical debts to get written off, but nowadays medical debts are among those with the fastest rising collection rates, and more people are finding themselves defendants in lawsuits over hospital and medical bills.

When you receive notice that you’re being sued because of a debt, it’s important to take that seriously and not to ignore the lawsuit. If you ignore it, the creditor can get a default judgment against you, which means they win the lawsuit just because you didn’t respond. A default judgment then allows them to take further actions to get the money from you, including garnishing your paycheck or bank account, or putting a lien on your property.

If you talk to an experienced Ohio debt defense lawyer, you may find that you have options you didn’t expect. Your lawyer may look at the facts and evidence in the case and see an opening to defend you against the creditor’s claims. If the circumstances are right, your lawyer may be able to get your case dismissed, or negotiate with the creditor to settle your debt in a way that is affordable for you.

Some possible defenses when you get sued for a debt may include:

  • You already paid the debt — If you have documentation that you paid the debt in full, or through an agreed settlement, then your lawyer may be able to get the case against you dismissed.
  • You never owed the debt — It may be that the creditor named you in the lawsuit because of a mistake. Maybe the true debtor had a similar name, or someone mixed up paperwork. If you can show that the debt isn’t yours, your case may be dismissed. However, if you co-signed the debt, or a former spouse was supposed to pay it through a divorce settlement but didn’t, you may be held responsible for the debt.
  • The debt has been discharged in bankruptcy — If you filed bankruptcy and included the debt, then the creditor is prevented from suing you for payment. While your bankruptcy is active, the creditor is prevented from suing you by a provision in federal bankruptcy law called an automatic stay that requires that all collection activity against you cease. Once your bankruptcy is discharged through a Chapter 7 or Chapter 13 bankruptcy, you no longer legally owe the debt.
  • The statute of limitations has expired — In Ohio, civil lawsuits to collect debts have to be filed within a certain amount of time or the creditor loses the right to sue you. That deadline is called a statute of limitations. For most debts, the Ohio statute of limitations is 6 years from the last time you made a payment or the account was closed. If a creditor sues you after the statute of limitations has expired, then your lawyer may be able to get the case dismissed.
  • The creditor doesn’t own the debt — To file a lawsuit, a plaintiff has to have standing, or in other words a legal status that gives the person or company the right to file a lawsuit. For a lawsuit regarding a debt, the plaintiff has to own the debt to have the right to sue. Let’s say you’re being sued over a medical debt, and the lawsuit was filed by the hospital, but it turns out that the hospital sold the debt to a collection agency. Once the hospital sold the debt, it lost the right to take legal action against you. If the entity suing you doesn’t own the debt, your lawyer may be able to get your case dismissed.
  • The plaintiff failed to state the basis for the lawsuit — It’s a basic principle that a complaint in a lawsuit has to give a legal reason for the suit, usually that you violated a statute or some common law principal. Many debt collection lawsuits are based on the common law principal of breach of contract, or in other words that you didn’t do something you formally agreed to do such as pay back a loan. If the lawsuit fails to allege that you did something that gives the plaintiff the right to sue you, then your Ohio debt defense lawyer may be able to get the case dismissed.

Facing Creditor Action? Call an Ohio Debt Defense Lawyer Today.

If you are concerned about being sued by a creditor or recently have been sued, an Ohio debt defense lawyer can help defend your rights and ensure the best possible outcome for your debt needs. Contact us today by calling (888) 726-3181, or you email us at advice@ohiodebthelp.com.
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