How to Dispute Debt Collection
Disputing a debt collection can be a scary process, especially when you go through the process alone. Regardless of whether the attempt to collect the debt is legitimate or fraudulent, there are a number of legal ways to deal with a debt collection.
If the creditor has not filed suit, you don’t have to pay anything, and you don’t even have to talk to the creditor.
If the creditor has filed suit, you have certain rights, including the right to dispute the debt in court.
You can always try to settle out of court with the creditor.
If someone claims you owe them money, and you dispute that you owe them, or if you dispute the amount, you may wonder: What can I do?
If the creditor has not filed a lawsuit
If the creditor has not filed a lawsuit, a creditor cannot force you to pay them any money. Also, if no lawsuit has been filed, you don’t even have to respond to any communication from a creditor. You may simply ignore the creditor. You can also communicate with the creditor and explain that you don’t owe the money. Or, you can try to enter into an agreement with the creditor as to how much you owe. The federal Fair Debt Collection Practices Act (FDCPA) even has limitations on how a debt collector may communicate with you. Under the FDCPA, a debt collector may not contact you if:
You insist that communication about the debt cease;
You inform the debt collector that you will not pay any money; or
The debt collector knows you are represented by an attorney, and the debt collector knows the attorney’s name and address.
To read this portion of the FDCPA, click here.
The FDCPA only restricts the activities of “debt collectors.” FDCPA defines “debt collector” as
"any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another."
Thus, if the creditor is not in the business of collecting debts for others, then, FDCPA doesn’t impose the above listed restrictions on him.
To read the FDCPA, click here.
If the creditor has filed a lawsuit
If the creditor has filed a lawsuit, the creditor must serve you with a summons. Within twenty days after you are served, you must file an answer in court. If you do not file an answer, the creditor may seek a default judgment against you. If the creditor obtains a default judgment, then the judge will rule that the creditor wins by default, and the judge will order you to pay the creditor whatever the creditor asked for.
If the creditor sues you, and you file an answer, you may dispute the amount you owe, in court. Even after the creditor files a lawsuit, you may still try to settle out of court with the creditor. Judges generally favor out-of-court settlements, and the creditor will often prefer to settle out of court also. This is because pursuing a lawsuit is expensive for the creditor. So, see if you can talk to the creditor and work out an agreement. You may also retain a lawyer to deal with the creditor.
One way to settle a debt collection case is through mediation. Mediation is a process where both parties meet with a neutral third party called a mediator. The mediator is not like a judge, in that he cannot order you, or the creditor, to do anything. But the mediator will try to guide each of you toward a settlement.
During the course of the case, you may also conduct what is called “discovery.” In Oklahoma law, discovery is a procedure where, you may send the creditor “discovery requests” which require the creditor to produce information relevant to the case. If you send discovery requests to the creditor, and the creditor does not produce the requisite information, the judge may order the creditor to pay your attorney’s fees. The creditor may also send discovery requests to you, and the judge may order you to pay the creditor’s attorney’s fees if you don’t produce the required information. Discovery may be an important part of a debt collection case, because the information produced can be valuable in showing whether you owe the debt.
If you can’t settle your case out of court, then, you may ask the judge for a trial. If the amount in controversy is over $1,500, you have the right to a jury trial in an Oklahoma state court. If the amount in controversy is greater than $10,000, you have the right to a 12-person jury; if the amount in controversy is less than $10,000, you have the right to a six-person jury. Three-fourths of the jurors (that is, nine votes on a 12-person jury, or five votes on a six-person jury) must concur, in order to render a verdict. However, if neither party wants a jury, the judge may hear the case without a jury.
If your case is in federal court, the U.S. Constitution gives you the right to a jury trial if the amount in controversy is over $20. The jury must have six to twelve members, and the verdict must be unanimous. However, just as in state court, if neither party wants a jury, the judge may decide the case without a jury.
At trial, you (or your lawyer) may present evidence showing why you do not owe the money the creditor claims you owe. The creditor may also present evidence showing why you owe what he says you owe. The judge or jury will then render a decision.
Under Oklahoma law, the creditor has the burden of proof. The creditor must prove, by a “preponderance of the evidence” that you owe what he says you owe. “Preponderance of the evidence” means “more likely than not.” The creditor must prove, to the judge’s satisfaction, that it is more likely than not that you owe the money. If the creditor can’t prove that it is more likely than not that you owe the money, then the judge should rule that you don’t owe anything.
For more information about the rules for how a debt collection case is to proceed (including out-of-court settlement, discovery, and trial) click on my blog post, “What Does a Civil Attorney Do?” This post describes the rules of procedure for civil cases. A debt collection is a civil case, and the rules that apply to all civil cases, govern debt collection cases.
At trial, if the judge rules that you owe what the creditor says you owe, you may appeal the judge’s ruling to the Oklahoma Supreme Court. If the judge rules in your favor, the creditor may appeal to the Oklahoma Supreme Court. To see how an appeal works, click here.
If a creditor is pursuing you, you have rights – Use them!
Congress, and the state legislatures, have enacted laws so that creditors can’t unjustly harass you or collect from you. If a creditor is trying to force you to pay a debt you don’t owe, take advantage of your rights. If you feel you need legal advice, the Persaud Law Office will be able to assist you. We have represented many debtors in collection cases. Contact us today.