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HOW TO COUNTERCLAIM A LAWSUIT - STEP
ONE
The
very first thing you do is request a Federal
Fair Debt Collection Practices Act debt
VALIDATION pursuant to 15 USC Section 1692(g)
See Validation of Debts. NOTE: Some refer to
Validation as Verification. In our humble
opinion there is no difference so don't let the
language confuse you. As far as we concerned,
for purposes of this article, Validation and
Verification are the same thing.
The United States Congress has given help
pursuant to 15 USC Sec. 1692(g). See Validation
of Debts. This statute requires a collector to
cease collection activities pending the debt's
verification or validation. In addition, any
credit collector found in violation of 1692(g)
is subject to suit and penalties pursuant to the
Fair Debt Collection Practices Act, 15 USC
section 1692(k). See Civil liability
What is validation or verification? Simply
put, proper validation of a debt depends on the
specific nature of the dispute. At a minimum,
the debt collector is required to confirm with
the debtor that the amount being claimed is
correct and that the person he is attempting to
collect the debt from is the person who owes it.
The most basic response to a
validation/verification request would be for the
collector to provide the name of the original
creditor and some simple statement regarding the
alleged amount owed. A Word of Caution; we have
seen, and you may see, Internet sites exclaiming
that collectors must provide an expansive amount
of information, and some will lead you to
believe that if the collector does not answer an
exhaustive list of specific validation requests,
then a violation of law is created. THIS IS
FALSE, FALSE, FALSE!! The United States Fourth
Circuit Court of Appeals has opined that
validation can be nothing more complicated than
this: "Verification of a debt involves nothing
more than the debt collector confirming in
writing that the amount being demanded is what
the creditor is claiming is owed; the debt
collector is not required to keep detailed files
of the alleged debt." See, Chaudhry v.
Gallerizzo, 174 F.3d 394 (1999).
All that having been said, requesting validation
of the debt works for two reasons: First and
most importantly, it buys you some time. Under
the FDCPA, all collection activity must cease
until the attorney puts that verification in the
mail to you. The verification is usually a
simple statement signed by the creditor, and it
will not take the collection attorney long to
obtain it or mail it, but it does "stay"
collection activities, including law suits,
until answered. Secondly, it sends a signal to
the collection attorney that you are not going
to be a rollover debtor. He knows you will be
active in the defense of the suit.
The last point is very critical because a
high percentage of collection suits simply
proceed to default judgment without any response
from the debtor. Default judgment is a
collection attorney's dream. He loves consumers
who don't answer law suits and, believe it or
not, a majority of law suits filed by collection
attorneys go unanswered because the debtors feel
like they can't fight the debt in court, usually
because they feel they owe the money so they
have no point in fighting. However, by filing a
validation request, you send a very strong
message to the collection attorney that you
aren't going to give up. He might actually have
to go to court himself and you may force him to
prove the debt. Also, by filing the validation
request, you actually stay the collection
proceedings. Thus, if a collection attorney
cannot move forward against you in a collection
suit, the chance of your having a default
judgment against you is greatly diminished. They
don't like that one bit.
HOW DO I FILE A VALIDATION NOTICE?
Validation of a debt is very simple and the
response is also very simple. The statute
requires the collector to give the debtor the
name and address of the original creditor. Some
courts have also required the collector to give
a simple accounting of the debt, i.e. the
principal, interest, and other added fees such
as attorney's fees. Again, we have seen a lot of
"on-line" verification/validation form letters
asking for information and documentation the
FDCPA doesn't require the collection attorney to
give you. Such far reaching requests immediately
tell the collection attorney you really have no
idea what you are doing. The form letters also
make threats which simply irritate the
collection attorney. And perhaps simply enough,
they are wrong. The FDCPA operates on the least
sophisticated debtor standard so you don't have
to be fancy. Just make sure you do it in writing
and send it certified mail. Simply ask the
attorney to verify the debt in accordance with
the FDCPA. See this sample validation letter:
REMEMBER: ALWAYS SEND LETTERS TO COLLECTION
AGENTS VIA CERTIFIED MAIL.
It's very important not to be antagonistic.
Don't threaten the collector and don't lie.
Don't threaten to sue him or report him to the
Bar or say you have an attorney if you don't.
These tactics don't intimidate collection
lawyers and simply mark your file for extra
special attention. Finally, a certified mail
written request for an FDCPA verification may
end the collection process. That is true in a
very small percentage of cases, but it is worth
taking as a first step.
STEP TWO
The second step is to file a SWORN DENIAL.
This step is vital, especially if you don't owe
all the money for which you are being sued.
Don't lie to the court; if you owe the amount in
question, you cannot deny the debt. However,
seldom does the collection attorney sue for a
correct amount. We’ll explain why in another
article, but for now take it on faith that
seldom can the collection lawyer justify an
accounting of the complete debt sued for. The
sworn denial is a simple statement filed with
the court once you are sued. This needs to be a
statement in WRITING that you FILE with the
court where you have been sued. It can be a
simple statement, but it needs to be typed,
signed, notarized, filed with the clerk of the
court, and a copy sent to the collection lawyer.
It needs to be a graduated denial. In other
words, it needs to say, "I deny that this is my
debt and if it is my debt, I deny that it is
still a valid debt and if it is a valid debt, I
deny the amount sued for is the correct
amount".The sworn denial is a powerful tool! It
eliminates the Sworn Affidavit of Account that
the collection attorney has. The vast majority
of collection suits proceed without a witness
for the creditor. The collection attorney enters
an affidavit, signed by the creditor, that the
debtor owes the debt and that this is the
amount. With that affidavit in hand, the court
gives the creditor a judgment. When a sworn
denial is filed, the debt collection attorney
cannot rely upon a sworn affidavit of account,
but must instead produce a live witness to
testify about the debt. The requirement of a
live witness changes the dynamic of the
collection action considerably. The likelihood
that the action will go any further now
increases again.
STEP THREE
The third step is to file a DISCOVERY. This
is more difficult than simply filing the sworn
denial. You need to file a written Request for
Production of Documents asking for a copy of the
contract or agreement upon which the debt is
based. If the debt is a credit card debt, it is
likely that the debt collection attorney will
not be able to secure a copy of the original
agreement, or if he is, he will not be able to
do so timely. Most credit card signature
agreements are scanned, or if older, microfilmed
and stored away in electronic archives. If it is
an old debt which has been sold to a debt
purchaser, the likelihood of retrieving the
original signed agreement decreases
dramatically. If you are being sued in a small
claims type court where discovery is not
permissible, ask for the agreement at trial.
FOURTH STEP
The fourth step is TRIAL. SHOW UP! We can't
stress that enough. As we've said repeatedly,
the vast majority of debt collection suits
proceed to default judgment because no one shows
up to dispute them. Show up and ask for a trial.
And remember, the worst thing that can happen is
the same thing that would have happened if you
hadn't appeared at all; a judgment. You can't
make it worse. If the attorney doesn't have his
live witness available, oppose the case being
continued. Tell the judge you've taken off work
to be there and are ready to go forward. If the
judge does continue the case to a new trial
date, show up again.
You will need to educate yourself. You won't be
able to equip yourself to spar with an attorney,
but knowing a little is better than knowing
nothing. You will need to read the Rules of
Procedure that govern the court and the Rules of
Evidence for that jurisdiction. Look them up
online. The Rules of Civil Procedure will govern
how the trial is conducted. The Rules of
Evidence will govern what the Judge is allowed
to see and hear. If you do have a trial and the
creditor produces a live witness, attack the
witness first and the debt second. The witness
can only testify from personal knowledge.
Generally, the witness has no personal knowledge
about you or your account, but only knows what's
in the file he got from the collection
department. If he is going to testify without
personal knowledge, but from the records and
documents of the business, then he has to have a
basis to do so. He needs to be the regular
keeper of those books and records and be
familiar with how they are kept and their
contents. Don't simply accept his answer when
the debt collection lawyer asks him if he is the
regular keeper of those books and records and is
familiar with how they are kept and their
contents and he says yes. Ask him how long he
has been with the company, in that job, what he
does on a daily basis, when he first saw your
file, if he knows from personal knowledge if
it's a complete file, etc. You must destroy his
credibility and ability to testify about the
papers he has in front of him. If you can do
that, then the debt collection attorney has no
case. If the witness is actually a good witness
and you can't prevent him from testifying about
your file, then you need to know your defenses
to the debt. The best defense is the Statute of
Limitations. The Statute of Limitations is the
time limit that an aggrieved party has in which
to file a lawsuit. It is a drop dead deadline.
Find out what your state's is and whether the
creditor is beyond that date. If it is, ask the
court to dismiss the suit. See Statute of
Limitations
LAST STEP: Okay, We promised that this would
be a four step process but we also assumed you
would win at trial, or, better yet, get the case
dismissed. Should you lose at trial there is one
Last Step. The last step, should you lose at
trial, is to APPEAL. Appeals can take a long
time to work through the system; from months to
years. That time is valuable and no collection
action such as garnishments can occur during the
pendency of the appeal (unless you live in a
jurisdiction that requires that you post an
appeal bond to stop collection during an
appeal). At each step in the process, you
increase your chances that the debt collection
attorney will give in and simply put your file
away. But remember, always be polite, never cuss
and don't hang up on him. You simply don't want
to make your case personal.