What Are My Defenses?

I tried to settle with the creditor and they refused. Is that a defense?

No. A creditor is not required to settle a debt, reduce interest, or write it off.

I don’t recognize the name of the creditor suing me. Is that a defense?

Possibly. You have the right to make the creditor prove that you are the one who owes the debt, and that the debt was not paid off or settled. For instance, someone else with your name may actually owe the debt, or someone using your name may have opened the account. If you are sure that there is a mix-up, go to court and tell the judge!  The creditor will have to investigate, and sue the right person.

Here are some reasons that you may not recognize the name of a creditor that you actually owe:

•          the creditor may have changed its name.

•          the creditor may have sold the debt.

•          the creditor may have transferred the debt to a collecting agency.

•          Aabankruptcy trustee or receiver may be suing you on behalf of the creditor.

•          the parent company of the creditor may be suing.

The creditor said that they had “written-off” the debt, now they are suing me! Is that a defense?

No. Writing off debt is a tax issue for the creditor – not debt forgiveness for you.  The creditor can still sell the debt or try to collect it.

What are my defenses?

•          You didn’t open or use the account (or authorize anyone else to do so).

•          Some of the charges are fraudulent (this is only a defense to part of the debt).

•          You paid the debt.

•          You settled the debt, and paid the amount agreed to in the settlement.

•          The creditor charged fees that were not legally allowed, or more interest than allowed.

You must present evidence to support these defenses, so always keep copies of payments, borrower’s notices, etc.  You can ask the creditor to provide this information, but they may try to drag out the case by refusing to provide it, or by claiming that they don’t have it.

by Dianna Coy Long at Mid-Missouri Bankruptcy Center