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The Basics of Defending Creditor Lawsuits

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This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

Can a creditor sue me if I owe a debt? Yes. In fact, it is quite common for creditors and debt buyers to file lawsuits to collect debts. In California, creditors and debt buyers of consumer debts must file the lawsuit in the county where you obtained the debt they are suing on, in the county where you lived at the time you obtained the debt or in the county where you live at the time the lawsuit is filed. It is unlawful for creditors or debt buyers to file a lawsuit against a consumer in any other county.

What is a debt buyer?A "debt buyer" is a company that specializes in buying and collecting old debts. If you fail to repay a debt, your creditor might sell it to a debt buyer. The debt buyer will then try to collect the debt from you. This practice is legal. Debts are often bought and sold more than once.

Can a debt buyer sue me if I owe a debt?Yes. If your creditor has sold your debt to a debt buyer, the debt buyer can sue you to collect the debt. This practice is legal.

If I am sued by a creditor or debt buyer, do I need a lawyer?Yes. Every defendant in a debt collection lawsuit should be represented by a lawyer. However, most low income Californians who have been sued over a debt will be unable to obtain free or reduced fee legal representation. Some private attorneys can cost almost as much, if not more than, the debt itself. Unfortunately, most low income Californians falsely believe that they have no choice but to represent themselves in court. Most people who have been sued are unaware that experienced consumer attorneys often take collection defense cases with very strong defenses on a contingency fee basis. In other cases, attorneys will represent low income consumers in collection defense cases for a reduced fee. Monthly payment plans are also common.

You should not ignore a debt collection lawsuit because you initially think that you cannot cannot find or afford a lawyer. Hundreds of low income Californians defend themselves in debt collection cases every single day, and most do so unsuccessfully. Even though a debt collection case is relatively simple and straightforward as compared to other kinds of legal problems, debt collection attorneys often rely on the fact that unrepresented defendants do not know their rights. You can fight back by educating yourself about your case! Read the information in these pages to familiarize yourself with the court process and the issues you will face as a defendant. If possible, you should contact one of our attorneys to obtain individualized advice about potential defenses you may have. In our experience, a little information goes an incredibly long way.

What is a Plaintiff? A plaintiff is the party who files the lawsuit. If a creditor or debt buyer files a lawsuit against you, the creditor or debt buyer is the plaintiff.

What is a Defendant? A defendant is the party who is sued by the plaintiff. If a creditor or debt buyer files a lawsuit against you, you are the defendant.

What is a Summons?A Summons is your official notification that you have been sued. It tells you how and where to file your written response in order to defend the case. A Summons is usually accompanied by a Complaint.

What is a Complaint?A Complaint explains why you have been sued. It contains the facts and the legal claims that are the basis for the lawsuit. In debt collection cases, the Complaint is often very short and may provide very little information.

What is an Answer?An Answer is an official written response to a Complaint. In your Answer, you must write all the defenses that you want to raise in the case.

What is a Cross-Complaint?A Cross-Complaint is a claim that you have against the plaintiff. The plaintiff may owe you money, or the plaintiff may have violated your rights or caused you some other kind of harm for which you want to recover money damages. You always have the right to file a Cross-Complaint against the plaintiff along with your Answer.

What should I do if I receive a Summons and Complaint?DO NOT IGNORE IT. You should always respond to a Summons and Complaint. The correct way to respond is to file an Answer in the clerk's office at the address provided on the Summons. The clerk will not give you an Answer form and cannot help you to complete an Answer. For more detailed assistance filing your Answer, contact one of our attorneys to obtain individualized advice about your case.

Is there a time limit for filing an Answer?Yes. If you were served with the Summons and Complaint in person, you must file your Answer within 30 DAYS. "In person" means that a process server came to your home or place of business and gave the papers to you personally. If you were served with the Summons and Complaint in some other way, you have 40 DAYS to file your Answer.

What if the time for filing my Answer has already expired?You should try to file an Answer anyway. As long as there is no default entered against you, the court will usually accept a late Answer.

What should I write in my Answer?Your Answer should contain all the defenses that you want to raise in your case. For more information, see Common Defenses to Creditor Lawsuits or contact one of our attorneys to obtain individualized advice about your case.

If you are rushed for time and do not know what to do, you can use a California Judicial Council form Answer and mark the box for "general denial." You can always amend your Answer later. However, please note that if you want to raise a defense of improper service, you MUST do so in your initial Answer, or you will not be able to do so at all.

What will happen if I ignore the Summons?If you ignore the Summons, the plaintiff will almost certainly ask the court to award a judgment against you. This kind of judgment is called a "default judgment." A default judgment usually awards the plaintiff everything that it asked for in the Complaint, plus interest and court costs. The judgment will accumulate interest at the rate of 10% per year and is enforceable for ten years if not satisfied. The judgment also gives the plaintiff the right to try to collect money from you by freezing your bank account or garnishing your wages. You can avoid a default judgment by filing an Answer and appearing in court.

What happens after I file an Answer?After you file an Answer, the court will notify you of your first court date. Your first court date could be anywhere from 1 month to 9 months after you file your Answer, depending on where you live. It is very important that you attend this court date. If you fail to attend the court date, the court will award a default judgment against you.

What is the "burden of proof"?The "burden of proof" is the responsibility to provide evidence in support of a legal claim.

Who has the burden of proof in a debt collection case?The plaintiff -- the creditor or debt buyer -- ALWAYS has the burden of proof in a debt collection case. This means that the plaintiff has to come up with evidence to prove to the court that (1) the plaintiff has the right to sue you; (2) the debt is yours; and (3) you owe the exact amount of money that the plaintiff claims you owe. You do not have to prove that you do not owe the money. Rather, the plaintiff has to prove that you DO owe the money.

Know Your Rights!

As a defendant in a court case, you always have the right to "put the plaintiff to its proof". That means that you can insist that the plaintiff come up with actual evidence to prove that you owe a debt. Although you should always be truthful in court, you do not have to admit that the plaintiff's allegations are correct.

What kind of evidence does the plaintiff need to present in order to meet its burden of proof? If you admit that the plaintiff's allegations are correct, the plaintiff can rely on your admission to win the case. But if you challenge the plaintiff's right to sue you, the existence of the debt, or the amount of the debt, the plaintiff must provide the following evidence to the court:

  • Proof that the plaintiff has the right to sue you. In the case of a debt buyer, the debt buyer must prove that it owns your debt by showing the court the contract of sale. This contract is called an "assignment." The assignment must mention your debt specifically. If your debt has been bought and sold multiple times, the debt buyer must present a chain of assignments that goes all the way back to your original creditor.
  • Proof that the debt is yours. Usually, this means an original contract with your signature.
  • Proof that the amount demanded in the lawsuit is correct. Usually, this means a complete set of bills or account statements. In the case of a credit card, the plaintiff also has to prove that each and every charge on the card was authorized.

All of this proof must come in a specific format, or else it is considered "hearsay," not admissible in court. If the plaintiff fails to meet its burden of proof by coming up with admissible evidence of your debt, the court must dismiss the case.

How can the burden of proof help me get a better outcome in my case?The plaintiff has to present quite a lot of evidence in order to meet its burden of proof. This evidence is often difficult or expensive for the plaintiff to produce. If your debt is old, or if it has been bought and sold multiple times, evidence of your debt may not exist at all. It is almost always much easier and cheaper for the plaintiff to dismiss the case than to come up with all the evidence needed to meet the burden of proof. That is why the plaintiff will nearly always want you to agree to a settlement.

Know Your Rights!

If you believe you do not owe the debt, never agree to a settlement. Insist on your defenses and put the plaintiff to its proof. If you have a solid defense, you have a good chance of winning the case.

If you would like to negotiate a settlement, use your knowledge of the burden of proof to make sure you get a settlement that works for you.

If you cannot afford to make a settlement agreement, or if your income is exempt from debt collection, you should put the plaintiff to its proof. There is a good chance that the plaintiff will be unable to meet its burden, and the case will eventually be dismissed.

Remember: If you do not appear in court, you will automatically lose. Showing up is often more than half the battle!