If you have bills piling up and know you cannot pay them, you may realize the situation is serious. However, you may never have expected a creditor or debt collector to take legal action and file a lawsuit against you. If you have been served by a private process server or the Sheriff’s office, you may be very tempted to ignore it. Unfortunately, this will not make it go away, and ignoring notice of the lawsuit is perhaps the biggest mistake borrowers make when they are the target of legal action.
If you ignore the lawsuit, you will forfeit your right to argue your case and defend yourself in court. Once you fail to respond, the party suing you will likely ask the court for a summary judgment, which will allow them to win their case automatically. After the summary judgment is issued, the plaintiff can then take unfavorable action against you, such as garnishing as much as 25 percent of your wages, or they may seize your property. Below, one of our Sunrise, FL debt attorneys outlines the defenses that may be available in your case.
Violations of State and Federal Laws
Borrowers in Sunrise, FL are protected by two main pieces of legislation. The Florida Consumer Collections Practices Act (FCCPA) is the state law that largely mirrors the federal law known as the Fair Debt Collection Practices Act (FDCPA). Under each of these Acts, debt collection companies are prohibited from engaging in certain tactics when trying to collect on the debt a borrower owes.
Debt collection companies cannot threaten or harass you when they are trying to recover the amount you owe. They are not allowed to use profanity when speaking to you or threaten to take legal action against you when they do not intend to. Debt collection companies are also prohibited from representing themselves as an attorney, or someone affiliated with a law firm when they are not. The law also makes it illegal for debt collectors to call you before 8:00 in the morning or after 9:00 at night. Although these prohibited acts are many, the law prohibits debt collection companies from many other actions, too.
Although the statutes are very clear about what debt collectors are and are not allowed to do, this does not prevent all of them from violating consumer protection laws. If a debt collector has violated your rights by breaking the law, you can file a countersuit against them. If you are successful, you can then claim any actual loss you suffered, statutory damages up to $1,000, and your attorney’s fees. You can also use the violation as leverage while negotiating a debt settlement agreement with the debt collector.
Lack of Legal Standing
Debt collection companies that file lawsuits in Small Claims Court, County Court, or Circuit Court, must have legal standing to do so. Standing refers to the legal right to file a lawsuit. If you have received notice that a lawsuit has been filed against you, it may be easy to assume that the debt collector has the right to do so. However, this is not always the case. By the time legal action has been taken against you, your account has likely changed hands many times. A creditor may have sold it to a debt collection company, which may have then sold it to someone else.
It is not uncommon for debt collectors to sue people when they do not have a right to. If the debt collection company cannot produce documentation proving that they own the account, they do not have legal standing. This can serve as a defense in your lawsuit and even get your case dismissed. Proving that they own the account is more challenging for debt collectors than it may seem. This is why these companies are always so hopeful that borrowers will ignore the lawsuit. If the lawsuit goes ignored, debt collectors do not have to prove they own the debt and will likely win their case automatically, even when they do not.
The Time Limit on Debt Collection Lawsuits in Sunrise, FL
Like the majority of other legal proceedings, debt collection lawsuits are governed by a statute of limitations or a time limit. The statute of limitations on debt collection lawsuits is five years, but the law is not as straightforward as it may seem.
Many actions can start the clock on the statute of limitations. Taking on the debt in the first place will trigger the statute of limitations. However, so will making any payment on the debt. For example, the statute of limitations on your debt collection case may have already expired but the collector files a lawsuit against you anyway. If you make a payment, in the hopes that this will stop the legal action, it will restart the statute of limitations and give the collector the right to sue you.
This is one reason it is so important to speak to a Sunrise, FL debt attorney as soon as possible after receiving notice of a lawsuit. A lawyer will advise you of the steps you should take, and those you should avoid taking, so your rights are protected.
Filing Bankruptcy To Protect Against Debt Collection
One way to protect yourself from a debt collection lawsuit is to file for bankruptcy. The two most common types of consumer files are Chapter 7 and Chapter 13. Chapter 7 is harder to qualify for but borrowers who are successful with their case can have most or all of their debt discharged. Individuals who do not qualify for Chapter 7 can file Chapter 13 instead. During Chapter 13 bankruptcy, debt is not discharged but instead, it is reorganized into a repayment plan that extends between three and five years. A Sunrise bankruptcy attorney can advise on whether bankruptcy is a good option, and which type you should choose.
Our Debt Defense Attorneys in Sunrise Can Provide the Defense You Need
If you have been notified of a debt collection lawsuit, the above options are just a few defenses available. We encourage you to speak with our top-rated Fort Lauderdale debt defense lawyers to learn more about the process in the state of Florida. At Loan Lawyers, our Florida foreclosure, bankruptcy, and debt attorneys can review all of your options with you and help you determine which strategy is best for you.
Call us now at (954) 523-4357 or contact us online to schedule a free consultation.
