Michigan

Classic Mythical defenses to debt collection

My fellow blogger and debt collection attorney, Michael Herrin, recently wrote a blog entry about bogus defenses to debt collection. His blog entry can be found here. He has come across the following defenses from debtors who believe that these defenses are good. He and I have both heard debtors attempt to use these defenses. Unfortunately, they are invalid. Mr. Herrin lists the following bogus defenses:

1. I haven?t heard anything about this debt for several years and therefore you can?t sue
me for it.

2. You can?t sue me because you don?t have a signed contract.

3. I have never heard of the company that is contacting me or suing me and I have no agreement with them, therefore I don?t have to pay them.

4. You can?t sue me because I am making payments.

None of these defenses is valid. I would like to add the following to the list of defenses that are simply not valid:

5. The credit card company has written off the debt so they cannot pursue me. People may see on their credit report that a company has written a debt that was owed by the consumer. The consumer then makes the mistake of thinking that because the credit card company wrote off the debt that this means that no one else may pursue the debt. Remember the credit card debt is transferable. Another company usually purchases the debt and hires a collection law firm to pursue it.

6. In my divorce decree, the court ordered by ex spouse to pay the debt. This is a very common mistake that is even made by some judges. Remember that when you get a credit card from a bank, you enter into a contract with the bank to repay that debt. That is your obligation. Just because your ex spouse has has ordered to pay the debt, does not relieve you of your obligation to the bank.

Bottom Line: If you get sued for a debt, DON'T SIMPLY CAVE IN AND PAY IT. Contact a collection attorney to see if the Plaintiff can sustain its burden at trial (see prior blog posts). If the debt appears to be valid, then have your attorney negotiate a settlement and payment plan. Your attorney can almost always negotiate a better payment plan than you can. She will charge you an hourly fee, but she should be very cost effective.

Full post as published by Michigan Collection Law Blog on December 29, 2007 (boomark / email).