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Common Defenses to Debt Lawsuits

Defenses to Debt Lawsuits

If you are being sued, there’s no question that this is a difficult time for you and your family. But Daic Law wants you to know that you are not alone, and there things you can do to relieve your debt-related worries. Sadly, many people are not aware that there are debt defense options that can challenge a creditor or debt lawsuit.

Our debt defense lawyer in Texas regularly helps consumers understand their legal rights and debt defense options. Here, we discuss some of the common defenses that our lawyers use to help clients reach a successful outcome.

What is Debt Defense?

If you are subject to a debt lawsuit, you should know that there are possible defenses that can help you obtain a more favorable outcome. Debt defense cases generally involve:

  1. Arguing that the plaintiff failed to prove their case
  2. Proving that you do not owe them money

If one of these strategies is successful, then you will win your case and the creditor or debt collector will lose. Sometimes, there is also potential for countersuing the plaintiff, especially if they violated your rights under the Fair Debt Collection Practices Act (FDCPA).

What are the Common Defenses to Debt Lawsuits?

The defenses that are applicable to your case depend on, well, your case. Every debt-related case is unique, and it is important that your debt defense strategy is tailored to your case, needs, goals, and rights. However, generally speaking, these are the most common defenses to debt lawsuits:

Mistaken Identity or Identity Theft

Mistaken identity happens when you are confused with someone else. Sometimes it is as simple as an incorrect name, address, or confused account number. Identity theft, on the other hand, happens when someone steals your personal and identifying information and uses it to open lines of credit or make purchases.

Mistaken or stolen identity is a strong defense to debt lawsuits. If you believe that you are being mistaken for someone else, or that your identity has been stolen, it is important to speak with a debt defense lawyer as soon as possible. Mistaken or stolen identity is not your fault, and you shouldn’t have to bear the consequences.

You Were an Authorized User

This defense is possible when you were an authorized user of a credit card, but never agreed to share responsibility for the bill. You had permission to use the card and that’s all. As an authorized user, you cannot be held responsible for debt that is unpaid. This is different than a cosigner, who signs a credit card agreement and agrees to be responsible for the debt.

No Cosigner Notice Given

If you cosigned on a loan, credit card, or auto loan and are being sued, you may be able to use this defense. A no cosigner notice defense hinges on the following:

  • You are not the spouse of the other signer
  • You did not receive any property or services
  • None of the loan proceeds went to you

With this defense, you will have the burden of proving that you did not, in any way, benefit from the proceeds of the loan or credit. It is a strong defense, but is most successful when you have a strong legal team on your side.

Dispute the Amount of Debt

You have the right to this defense if you believe the amount of the debt claimed against you is incorrect. The plaintiff (creditor or debt collector) has the burden of proving that you owe the amount listed in the debt collection lawsuit. They must prove all elements are correct, lawfully charged, and agreed to by both parties in the contract. That includes proving principal, interest, collection fees, and any attorney fees.

With this defense, you have the right to demand all original documents, contracts, receipts, statements, and other relevant documents. The plaintiff must provide you with evidence supporting their claim.

You Paid the Debt

You can use this defense if you paid the debt in part or in full but did not receive credit on your account. However, you will have the burden of proving that you made payment.

 Statute of Limitations

The statute of limitations is, essentially, a deadline. This is one of the most common defenses to debt lawsuits. In Texas, creditors have four years from the last payment or activity on your account to file a lawsuit. This is a good defense if you can prove that the creditor filed the lawsuit after the statute of limitations expired. For example, if the statute of limitations expired on 2/2/2022, but the date of the lawsuit is 2/22/2022, then you may have an absolute defense because the statute of limitations has expired. In many of these cases, the court dismisses the lawsuit altogether.

You Have Bankruptcy Protection

If you have been sued by a creditor or debt collector but have previously declared bankruptcy, then the debt you are being sued for is no longer legally collectible. Once you file for bankruptcy, all debt collection activities against you must stop. Furthermore, if a debt was discharged during bankruptcy but you are being sued after-the-fact, you have an absolute defense against the lawsuit.

Learn More About Possible Defenses to Debt Lawsuits

If you are subject to a lawsuit from a debt collector, creditor, or debt buyer, don’t wait to find out your options for debt lawsuit defense. As you can see, there are many possible defenses to debt lawsuits. However, it is important to work with a skilled lawyer to explore which option(s) are most applicable to your situation.

At Daic Law, we carefully review every client case to determine which debt defense options are most appropriately and most likely to succeed. Get started today with a free consultation with our debt defense attorney. Call us at 877-893-6040, or email us at info@daiclaw.com to learn more. We help clients in Houston, Dallas, San Antonio, Austin, and throughout Texas.

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