THE BLOG
09/03/2014 11:18 am ET Updated Dec 06, 2017

Four Magic Words to Get Out of a Debt Collector Lawsuit

What I'm about to offer you can be used for good as well as evil so please use this information responsibly. Additionally, I always urge all of my readers to consult with an attorney licensed in their state for legal advice. I am not a lawyer.

But over the decades I've been helping people with problem debt, and there is one constant that needs fixing. When people are sued by a debt buyer or debt collector over an old debt, rather than show up and defend themselves they stick their head in the sand and lose by default.

I completely understand how the thought of having to go into court to face someone suing you is a difficult emotional experience. It's scary. You've probably never been in that situation before and have no experience in handling such a thing and on top of that, it's about you. Double or triple the stress.

But what is really happening is about 90 percent of consumers sued just never show up for court so they lose by default when they could have easily won and had the debt completely eliminated. Those folks are throwing away a perfectly good opportunity to make a debt go away because they are scared.

If you have an old debt that has been turned over to a new company it is unlikely that company has evidence or proof about any contract for the debt, how the balance was calculated, or even if the debt is really yours at all. I've also watched debt buyers go after consumers long after the statute of limitations has expired and the debt cannot be legally enforced.

If people just got some good legal advice about handling the suit rather than doing nothing there would be significantly fewer consumers facing judgments and wage garnishments after losing in court by default.

Now this information can be used for evil if you know you actually owed a debt long ago and just don't want to pay it any more. But a vast majority of people can use this information for good by utilizing the approach and the four words I'm about to give you for debt you don't recognize or think is valid.

The Four Magic Words

When you go meet with the attorney in your state they will tell you the four magic words you can utter to make a huge dent in the case against you. The words you want to remember are: "Show me the evidence."

As an example of how this is effective and works, just listen to the recent interview with Ira Glass and Jake Halpern in the first 10 minutes of this radio show.

The radio show is a good example of how this same think happens day-after-day across America.

All you are asking the person suing you to do is just validate the debt is real and you really owe the amount they claim. I've written articles on this before and you can find more information on how to validate you debt here, here, here, and here.

The bottom line is you are not trying to pull some fancy legal maneuver or in fact do anything tricky. All you are doing is asking for the person suing you to show you the basis of how they are claiming you owe the money they are demanding from you.

One recent case I know about was brought by a debt collector who was actually not licensed to collect debts in the state the consumer lived in. When that fact hit the fan the debt went away.

Where is the harm in standing up for yourself? If you don't, you are going to lose anyway. So fight.

The reality is most debt buyers just don't have the proof they need and so they will drop the case and stop trying to collect on that old unenforceable debt.

The reason for this has to do with the sloppiness of the data when a creditor sells a bad debt to a debt buyer or farms it out for collections sometimes. When a creditor sells an old debt they almost never provide copies of any agreements you've signed, details on transactions, or even any way to calculate the amount they claim you owe.

Without this information the debt buyer is relying on you not uttering the four magic words and then they will scare you into going on the hook for the debt by suing you and counting on you to not defend yourself.

So if you or someone you know is facing a suit over an old debt by a company you don't recognize or of an amount you don't think is valid, then do something about it.

There is no substitute for good legal advice so find a local attorney who is licensed in your state and spend some money to get good advice before you go to court. Otherwise you are just screwing yourself into a debt you never should have paid.



Get Out of Debt Guy - Twitter, G+, Facebook

If you have a credit or debt question you'd like to ask, just click here and ask away.

If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.

Source

PHOTO GALLERY
Ten Common Money Scams