Written by attorney George Charles Samiotes

12 Defenses to Debt Collection Suits

Many Americans are currently riddled with consumer debts, including credit card debt, cell phone debts, and credit card debts from retail stores. Often these creditors will bring suit against the debtor for what is called a “Breach of Contract." Nevertheless, you may have certain defenses against creditors.

Below is a non-exhaustive list of defenses that can be asserted if you are named in a collection lawsuit. It is always a good idea to consult an attorney regarding these defenses and have them draft the necessary paperwork, including your answers and counterclaims.

1. Did the creditor accept a smaller sum from you than the amount you owed in satisfaction of the claim?

If a creditor accepts a smaller sum than the amount owed in satisfaction of the debt you may have a defense called Accord and Satisfaction.

2. Did you pay the creditor the amount owed in full?

This is called the Payment defense.

3. Did you declare bankruptcy?

Declaring bankruptcy discharges your debt owed; meaning you are no longer under a legal obligation to pay the debt.

4. Were you under 18 or mentally disabled when you signed the credit agreement?

This is called the Minority & Capacity to Contract Defense. This makes the contract “voidable."

5. Has the creditor provided you with any proof of an assignment of the debt?

Collection debts can be assigned to third parties. This typically occurs where a creditor transfers his/her rights under the contract to third party such as a collection agency. If the creditor has not provided any proof that they transferred their rights under the credit agreement to some collection agency you may have what is called a Real Party in Interest Defense.

6. Does the collection agency hold several of your credit card debts? Have they sued you on the first credit card debt and obtained a judgment? Did they then sue you on a second credit card debt?

If this scenario has happened to you, you may have a Res Judicata Defense.

7. How long has the creditor waited to bring suit against you for the debt?

In Massachusetts, the creditor must be able to show that they brought the suit within the time limit (this is known as the Statute of Limitations Defense). If they have not brought suit within the time limit the creditors’ claim may be barred. This time period depends on the kind of debt you have:

  • In contract suits: the creditor has six years to bring suit against you.

  • If the creditor sold you goods and you have not paid for them: the creditor has four years to sue you.

  • If the creditor claims that you owe money on interstate cell phone charges: they have two years to sue you.

8. When you signed the credit agreement did the employee of the credit card company falsely misrepresent something to you? Did you rely on this false misrepresentation when you signed the agreement?

If so, you may have a “fraud" defense.

9. Has the debt collector done any of the following:

  • Told others that you owe this money?

  • Contacted you after your attorney informed the debt collector that all communications relative to the debt should be addressed to him or her?

  • Contacted you at an unreasonable hour or harassed or embarrassed you?

  • Called you more than twice in a 7 day period at your house?

  • Told others who reside in your household either orally or in writing that you owe this money?

If any of the above have happened to you, you may have a “good faith and fair dealing defense" and a Chapter 93A Unfair/deceptive acts defense.

10. Did the creditor card company know or should know that you could never pay off the balance (e.g. because you’re on social security?) Did the credit card company keep the card open even though they knew you would inevitably default? Did the credit card company fail to close the account? Did you make a good faith effort to pay down the debt? Did you attempt to work out an agreement with the credit card company?

If so, you may have “mitigation and unjust enrichment" defenses.

11. Did the credit card representative use deceptive sales techniques or were the terms of the credit agreement so unfair, unreasonable, one sided and outrageous?

This is known as the unconscionability defense, which is further subdivided into procedural and substantive unconscionability.

12. Have the credit card companies sued you when you are on active military duty?

If so, you may have a defense under the Servicemembers Civil Relief Act.

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