How to Win Your Debt Collection Lawsuit Without Going to Trial

Have you been sued by a debt collector and the thought of going to trial is keeping you up at night? In this video I’m going to share with you three ways that you can win your debt collection lawsuit without even going to trial. But first, if this is your first time here to my YouTube channel, go ahead and click subscribe and click on that little bell, that way you’ll be notified each and every week when I put a new video up that’ll help you resolve your serious debt problem. All right, let’s talk about winning your debt collection lawsuit. Now in most of these lawsuits, when the debt collector files a suit against you, a lot of them go to a default ’cause people don’t respond.

In fact, there was a nationwide study that shows over 95% of people don’t respond to their debt collection lawsuits, so they lose right out of the gate. But if you’re watching this video, you’re probably one of the exceptions. You filed an answer or some type of response to the complaint or the petition, and now your case is headed towards that slow march to trial. And for a lot of people the thought of actually going to court and having to go up against the debt collector’s attorney and the idea of testifying in court just causes a lot of stress, a lot of anxiety. I 100% get that.

It can be a very intimidating process. So, in this video I’m going to share with you some ways that you can resolve your lawsuit without going through that whole trial process and hopefully help you get a little more rest and a little less anxiety about this whole process.

Now, the first one is you need to evaluate your case to determine if you have any strong defenses, like of statute of limitations. Now the statute of limitations, in each state there’s all these various laws that state how long a creditor has from the time you stop paying on the card until they can actually file a lawsuit against you. Now in the notes I’m going to put a list of what the statute of limitations is in all 50 States.

My disclaimer to this is I don’t know if it’s going to be up to date by the time you watch this video. I don’t even know if it’s up to date right now. I practice law in Arizona, I’ve done my research on this, and I’m just providing you this as a starting place to get some idea of what the statute of limitations is in your state, because it’s different in every single state throughout the country.

So go ahead and take a look at the notes to this video. You’re going to see the statute of limitations for credit card debt specifically in your state.

So that’s how long they have to file the lawsuit from the time that you stop making payments on it until they file suit. If they filed their lawsuit after the expiration period, then you can go in and you can ask the court to dismiss the case. So just to be clear. So let’s say that you had a credit card and you stopped paying on it, 30 days later it went into default, and they started collections. If you live in the state of Arizona, where I practice law, the credit card company has six years to file a lawsuit against you.

And so if it had been more than six years since you stopped making payments on it and then they filed their lawsuit, then I can go in and I can ask the court to dismiss it. Now how do you do that? In most jurisdictions you can file what’s called a motion to dismiss. This is a written motion that’s filed with the court and it outlines to the court what the statute of limitations is, the reason why they violated the statute of limitations, and why their case should be dismissed. Sometimes it’s done through what’s called a motion for summary judgment, but often, particularly if you’re representing yourself, a motion to dismiss will suffice that you submit to the court.

This is a pretty huge deal, if you can get this, ’cause not only will it get the case thrown out, but it also made entitle you to compensation under the Fair Debt Collection Practices Act, the FDCPA. This states that credit creditors and debt collectors cannot sue you for an amount that you don’t owe. And if the statute of limitations has expired and they sued you anyway, they may be opening themselves up to liability.

So, looking at the statute of limitations, that’s the first way that you can get rid of this case without having to actually go through trial. That can all be done through paperwork.

So, the second thing, though, let’s say that they’re within the statute of limitations, so you’re wondering what other defenses or strategies or techniques you can use to get this case thrown out. One of them is that in virtually every single credit card agreement, and I’m talking about the terms and conditions that they mail out when you open up a credit card, there’s a provision in there for private arbitration. And a private arbitration agreement essentially says, look, if there’s a dispute between the parties, either party can elect to have this decided by a private arbitrator rather than going through the court process.

Now nine times out of 10, actually, I’m going to say almost 100% of the time, the creditor is not going to use the private arbitration clause. They don’t want to go through private arbitration, and there’s a reason for that, and the main reason is it’s really expensive to do it.

Their whole goal is to get a judgment against you with spending as little amount of money and time as possible and then garnish your wages or go after a bank account.

That’s what their end game is and their whole business model is. But they put this private arbitration clause in there and you, as a party to that contract, can actually invoke it as well, even after a lawsuit is filed. So if there’s a lawsuit that’s been filed and you see the terms and conditions for the particular credit cards that they’re suing you on, and if they haven’t provided those to you, you can look those up online.

Just put in the year that the card was open, what type of card it was, and you’re going to see that there’s different depositories online where you’re able to download copies of that.
Look at the language in the private arbitration clause. This is all the fine print that nobody ever reads when they sign off on these things.

And it likely says that you can ask the court to dismiss the case and allow the parties to participate in private arbitration. So that’s done by filing a motion to compel private arbitration. You attach a copy of the arbitration clause to that and say, “Look, judge, “this says that either party can request this.”I’m requesting private arbitration.” So now you may ask yourself, well, why would I do that? It’s just going to kick me out of court and then I’ve got to deal with this in arbitration. I can tell you in most instances that the creditor is not going to participate. They’re the ones that have the claims against you, so they’re going to be the ones that are going to have to file the arbitration claim with the private arbitration company.

It’s usually filed with what’s called AAA, the American Arbitration Association. And here’s the reason why they’re not going to file.

The fees on this are very, very high. It could cost them literally more than they’re suing you for to be able to try to go through that process. There’s an initial filing fee, the arbitrator has to be paid, and then there’s some other fees associated with it.

So in my experience, if the court compels private arbitration, usually the case is done. The creditor is not going to pursue it. They’re going to put you in a different pile and they’re going to go onto the next one. So private arbitration is the other way that you can try to resolve this. Now the third and final way is settlement.

Now this may be adjusting what you’re defining as winning for your debt collection lawsuit. To me, if you can settle this for a low dollar amount, that’s still a win in your category. If you can come in, if they’re suing you for $5,000 and you can sell this for $800 or $1,000 dollars, that’s still a win. Because if someone has said to you before they filed the lawsuit, “Hey, if you pay them $800, this whole thing goes away,” you would have jumped on that because that’s a pretty good deal.

So you can still reach out to the creditor, you can try to settle it, you can offer different proposals.

In every jurisdiction under the rules of evidence, settlement discussions are not admissible in court. So if you call them up and say, “Hey, I’ll offer you $500 to get this thing to go away,” they can’t then run into the judge and say, “Hey look, judge, they already offered $500. “Clearly they owe it.” They can’t do that. So there’s some benefit in trying to see if there’s some middle ground that can be reached, and generally start lower than the total amount that you’re able to pay ’cause no matter what you offer, they’re going to come back with some type of counter offer.

So those are the really three ways that you can avoid trial altogether and still come out in a positive situation if you’re facing a debt collection lawsuit. So again, the first one is to look to see if the statute of limitations has expired. Again, take a look at those notes that I have below the video here, that’s going to go through each state statute of limitations. Next you can look at to see if there’s a private arbitration clause. Look at the terms and conditions for that particular credit card.

And the third is look for different settlement options. I have other videos on my YouTube channel that can walk you through each of these processes individually so that you can see how they are in a little more detail. If you have any other questions, feel free to check out the other videos. I appreciate you watching today.

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