Answering a debt collection complaint in state court is straightforward and fast, particularly if you have a sample answer form to use as a guide. The following information applies to cases involving unsecured debts, such as alleged past-due balances involving credit cards, medical providers, and other service providers. The brief guide below provides a summary of the steps for responding to a debt lawsuit in all fifty states. The huge debt collection and debt buying industries operate as assembly lines. The debt collection industry generates corporate revenues in excess of 2.4 Billion Dollars per year. These industries rely on the simple fact that most debtors do not respond to debt complaints. By responding to a debt collection complaint, you have a significant chance that the debt collector will walk away from the debt and turn its focus on easier targets (i.e., the thousands of debtors that do not respond). Debt collectors are looking for default judgments, which destroy the lives of consumers but make predatory collection firms rich.
Step One: Service of Court Papers on the Debtor
Credit card companies, hospitals and other plaintiffs start their lawsuits by filing complaints (typically in your local state court) and arranging for personal service of the "Summons" and "Complaint" upon the debtor. In some jurisdictions, such as New York, "service" of court papers is done by private "process servers". In other states, such as Maine, court papers are served by local sheriffs. Regardless of whether the papers are "served" by a sheriff or licensed process server, their only role is to hand you the papers. Once you receive the papers, you usually have 20 days to respond.
Step Two: Deciding Whether to Respond (short answer: you should always respond)
Most debtors are not familiar with debt collection laws, and therefore do not know whether or not know they have valid defenses. Many people assume that if they can't afford a lawyer, they have no chance of winning against a large debt collect firm. The credit card companies and debt collectors know that most of the suits they file (they file them by the thousands, clogging up the courts) will result in a default judgment simply because most people don't bother responding. Once a debt collector obtains a default judgment, the judgment will earn interest every year (for example, 9% in California; 10% in California), and it will haunt debtors for years. In actuality, you don't need to have a lawyer to defend against a debt collection lawsuit. Even without a lawyer (i.e., representing yourself), you have a good chance of having your debt cancelled (or at least substantially reduced) merely by responding to the lawsuit (i.e., filing an answer with the court).
During the past five years, the steady flow of state court debt collection lawsuits has turned into a flood. This is because debt buyers have purchased stale debts for pennies on the dollar, inflicting consumers (and the court system) with an enormous burden. In many cases, the statutes of limitations already expired for the debts. Because few debtors are aware of their valid legal defenses and thus fail to answer the complaints, the debt collectors win on default. As a practicing attorney, I spent years witnessing these injustices. This website was created to provide debtors with tools and information to fight back. Even if you owe the money, you can win if the statute of limitations has passed or the lawsuit was not brought in a timely manner. Remember, the debt collector bears the burden of proving its case.
Step Three: Answering the Complaint
In most states, you need to file an "Answer" with the court within 20 days after being served with the summons and complaint. Answer forms need not be lengthy. In fact, it is preferable and effective to keep your answer brief and simple. In a nutshell, an answer form is a letter that does the following:
- At the top, has the caption (i.e., title) of the case, with the docket number of the case at the right side of the page.
- In the body of your answer, you should insert simple paragraphs, each of which responds to a paragraph in the complaint. Usually, the complaint will contain a list of concise and numbered paragraphs, each of which contains a single allegation. The body of you answer form should contain a similar, numbered list of paragraphs, each corresponding to a numbered paragraph in the complaint. For example, you can respond to a particular paragraph in the complaint by typing, "Defendant denies all of the allegations contained in paragraph # __ of the Complaint". Under the rules of most courts, if you fail to deny any allegation, it is "deemed" admitted. Therefore, it is important that you carefully read and respond to each paragraph of the complaint.
- The body of your Answer should also include your affirmative defenses, which may include statute of limitations (in other words, the debt collector waited too long) and lack of legal standing (the debt collector is not the party with a valid legal interest in the debt). The "lack of standing" affirmative defense is particularly effective because it is common for many debts to pass through the hands of many debt buyers before a debt collection lawsuit is filed in court. At each stage of the process, the amount of documentation that the debt buyer possesses or is able to obtain from the original debtor decreases. As a practical matter, this means that the debt buyer who is filing the claim against you may find itself completely unable to establish that it has any legal interest in the debt. Debt buyers know this. However, they rely on the fact that thousands of debtors each year default (i.e., they do not answer). In essence, when debtors default, a debt that may be completely invalid is legalized.