How to Use an Affirmative Defense in a Collection Agency Lawsuit

If you've ever had the unfortunate experience of answering the telephone only to discover an angry debt collector on the line, you've probably faced the old, "Pay up or we'll sue" ultimatum. In reality, collection agencies rarely file a debt collection lawsuit unless the debt you owe exceeds $1000. Even then, the trouble of pursuing legal action over a delinquent debt is often more trouble than its worth for bill collectors.

While a lawsuit isn't likely, collection agencies do occasionally sue. If you receive a formal summons and complaint in the mail from a debt collector, you've been sued. Provided you play your cards right and present both the court and the collection agency with an affirmative defense, you may be successful in having the lawsuit dropped.

What is an Affirmative Defense?

An affirmative defense is any defense that stands regardless of if you actually owe the debt or not. For example, unsecured debts carry a statute of limitations. Debt collectors cannot legally file a lawsuit against you after the statute of limitations expires. Because most debtors aren't aware of the statute of limitations, its easy for debt collectors to file a lawsuit and walk away with a default judgment. Debt collection judgments are enforceable regardless of whether or not the collection agency followed the proper protocol when suing.

If a collection agency sues an informed debtor outside of the statute of limitations, however, and the debtor notes the statute of limitations as his defense, he has chosen an "affirmative" defense. Claiming an affirmative defense does not necessarily argue that you don't owe the debt but rather than the collector does not have the right to collect.

An expired statute of limitations is one type of affirmative defense.

Filing Your Affirmative Defense

You can't simply answer the summons and complaint, file a Notice of Appearance and show up in court with a surprise defense. If you plan to use an affirmative defense in court, you must include this fact and note which affirmative defense you're claiming when you file your answer. You must send the collection agency a copy of the answer you file with the court that notes your affirmative defense.

The Collection Agency May Drop Its Lawsuit

Debt collectors don't want to fight you in court. A collection agency's goal with a lawsuit is to obtain a default judgment from the court. The collection agency gets a default judgment if you do not respond to the lawsuit summons and complaint or file a Notice of Appearance noting your intention to appear in court. When you do not respond, the court assumes the collector's claim is valid and awards it a judgment by default. Responding and defending yourself against the debt collection lawsuit places the burden of proof on the creditor.

Collection agencies often lack the paperwork necessary to prove that you actually owe the debt they're suing over. When you respond to the lawsuit, the collection agency's job gets much more difficult. If you respond to the lawsuit with an affirmative defense, however, its unlikely that the collection agency will be able to win its case – even if the fact that you owe the debt isn't in question.

In order to minimize the company's financial losses, a debt collection agency will often drops its lawsuit after receiving notice of your affirmative defense. This prevents the company from having to shoulder the burden of further court costs and attorney fees for a case it stands a high chance of losing. 

Related Posts:

How to Respond to a Bill Collector's Lawsuit

Beware a Discover Card Lawsuit

How Collection Agency Debt Can Turn Into a Default Judgment