How to Beat Junk Debt Buyers in Court

Chloe Meltzer

September 09, 2021

Don't be clueless when a debt lawsuit comes your way.

Summary: Are you being sued by a junk debt buyer for an old debt? Learn how to make the right defense to beat junk debt buyers in court.

In many cases being sued for debt is a scary experience. But what you might not be aware of is that many attorneys representing debt buyers do not have the proper documentation to sue you. Summons and complaints are often sent out to people who assume they either need to give up the money or hide, but this is not the case. You should always respond to a summons and complaint with a legal Answer, but you should also ask for proof of their ability to collect your debt.

In the U.S court of law, whoever is suing you for debt must prove that you signed a credit agreement or that you agreed to pay the debt in some way. Most junk debt buyers do not have this but assume you won't ask for the proof. That is why you need to know your rights and how to handle a court case with junk debt buyers.

Make the right defense the right way with SoloSuit.

The typical debt situation in America

After you receive a credit card you may experience bad financial times. This might include a job loss or economic distress. Then this leads to a hard time making payments. Although many people try to work with their credit card companies, in any case, it is common to fall behind on payments. After the credit card account is at least 120 days delinquent, the account will become “charged off”. This means that the original creditor has written off the “bad debt”. Then, the creditor will do one of the following:

  • Clear books of the bad debt
  • Take a tax write-off
  • Collect off of bad debt insurance
  • Sell the debt to a third-party debt collector (debt junk buyer)

When the debt is charged off you still owe the debt, it just means that you no longer owe the debt to the original creditor because someone else has purchased it. Once the creditor sells the account to a junk debt buyer, it will be placed with many others in a portfolio. It can include thousands of accounts within each portfolio.

Junk debt buyers will buy these portfolios at pennies on the dollar. This means that you no longer deal with the original creditor and rather the debt buyer. This is typically when a lawsuit will be filed against you for the full amount. It might even include court costs and attorney's fees added on with interest.

Don't let a default judgment get filed against you. Respond with SoloSuit.

What you need to know

Typically a junk debt buyer doesn't know much about the debt. They have thousands of debt names on a spreadsheet, and they will attempt to collect. In many cases, they do not need to prove they owe the debt because consumers will ignore the lawsuit.

This is the wrong thing to do. If you ignore the lawsuit then a default judgment will be placed against you. This will allow the junk debt buyer to garnish your wages, pull money from your bank account, and even freeze your assets.

If you challenge the lawsuit and ask for proof, you have a much higher chance of beating the lawsuit or even settling for a smaller amount. This can be done out of court and is called a “settlement”. Because they have purchased your debt for a small amount, they are usually willing to let it go for less because they will still make money on their investment.

Using arbitration to beat junk debt buyers in court

One method that is unknown to many is using the arbitration clauses in consumer contracts for your benefit. Most underlying credit card agreements in debt buyer lawsuits contain mandatory arbitration clauses. This means that you can convince them to arbitrate their claim against you.

There are a few reasons why you might want to arbitrate within your debt-collection proceedings:

  • Increases the cost of collection for the junk debt buyer
  • Informal process that allows you to defend and represent yourself.
  • Attorney's of debt buyers are often not familiar to the arbitrators.
  • Does not appear in the public record section of your credit report if you lose.

Make your case with SoloSuit and win in court.

Why arbitration works

Debt collection lawsuits are typically cheap and effective. If you choose to go through arbitration, it is carried out by a private arbitrator. Most credit card arbitration agreements state that the debt buyer has to pay all of the arbitration fees. These can be extremely expensive as compared to a debt collection lawsuit.

Additionally, unlike a standard court case, a debt buyer cannot recover its court costs in the arbitration award. Therefore, arbitration will always be more expensive for the debt buyer. Plus these costs cannot be shifted to the consumer should you lose. In many cases, the debt buyer will forgo the lawsuit altogether to avoid this.

If the debt buyer won't drop the case, you still have a much better chance of leveraging a good settlement. This means that instead of paying a higher settlement because you have no leverage, you will have the opportunity to ask for a settlement even as low as 30% of the total amount owed. If you do settle ensure that the debt buyer includes the following in the conditions:

  1. Do not sign an agreed judgment
  2. Delete the trade line from your credit report

Protect yourself from creditors by responding with SoloSuit in 15 minutes.

Benefits of arbitration

In an arbitration, the debt buyer is unable to turn the junk debt into a “super debt”. This means that you can no longer have a default judgment placed against you. This saves you from wage garnishment and asset seizure.

Additionally, the statute of limitations for a judgment is anywhere from four to six years on average (depending on the state). Because of this, if you cannot have a judgment placed against you, the statute cannot start. This gets you closer to the statute expiring and being unable to be sued for debt entirely.

Although arbitration is not the best choice for every junk debt buyer lawsuit, it can be the right choice for many. You need to examine your options, consider the pros and cons, but always send a legal response via an Answer to the debt buyer.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to answer a summons for debt collection guides for other states

Here's a list of guides for other states.

All 50 states.

Guides on how to beat every debt collector

Being sued by a different debt collector? We're making guides on how to beat each one.

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendant's Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouse's Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

You're Drowning in Debt — Here's How to Swim

Help! I'm Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Here's What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review