Credit Card Debt Litigation Basics

Being Sued for a Credit Card Debt - Basics Part I

According to the U.S. Federal Trade Commission (FTC), if you have been sued for a credit card debt, "whatever you do, don't ignore the lawsuit."

"Even if you don't think you owe that debt. Responding to a debt collector's lawsuit will likely put you in a better position, cost you less in fees, and give you more control over how you repay the debt." 

This booklet is intended to be an introductory guide for consumer debtors to understand the basic debt collection litigation process, with a focus on credit card debt collection. If you are sued, the most important thing is to respond. This will give you a guide to responding.

First, it is essential to know that the legal rules for consumer debt collection differ from those for commercial or business crdit carddebt. According to the Fair Debt Collection Practices Act (FDCPA), a consumer debt is an obligation of a natural person to repay for goods or services primarily for personal, family, or household purposes. For example, if a credit card is in the name of a business or an LLC, it is not the debt of a "natural person."

Second, it is necessary to understand that the identity of the debt collection plaintiff is important. A consumer credit card debt collection lawsuit can be brought by different types of creditors and the rules are not the same for the different types:

• - the original credit card issuing creditor, 
• - a third-party debt buyer, or 
• - a debt collection agency. 

The FDCPA does not apply to original creditors that collect their own debts and it might not apply to third-party debt buyers depending on the circumstances.

Third, many states have consumer protection laws that may be more debtor-friendly than federal laws. Procedural rules and deadlines for responding differ among the states.

Litigation basics

In most U.S. jurisdictions, a civil action begins when a plaintiff (the party initiating the lawsuit) files a complaint with the Clerk of the Court. However, the action does not officially begin for any defendant (a party being sued) until they are formally served with copies of the complaint and a summons. This process, called "service of process," must follow specific methods that vary by state. Each jurisdiction has its own rules for proper service.

Once served, a defendant must deliver a response to the complaint to other parties involved and file the signed original with the court clerk. However, some state small claims courts skip the requirement for a written response. In these cases, the cause is immediately set for a hearing. The summons will include the hearing's time, date, and location.

The timeframe for serving an answer is typically 10 to 30 days, depending on the jurisdiction and type of proceeding. Some small claims courts do not require a written answer.

Key Components:

The Summons:

A standard court document that includes:

• The names of the plaintiffs and defendants,
• the court's name, address, and case number,
• the date the summons was issued,
• the date the defendant must respond or the time and location of a hearing,
• the name and address of the plaintiff's attorney, and
• it may incorporate a section for "proof of service." The proof of service may be a separate document.

These are the instructions to the defendant:

1. Serve written defenses (answer) on the plaintiff's lawyer,
2. within 20 days of receiving the Summons & Complaint (the response time is different in other courts),
3. file the original Answer with the Clerk of the Court,
4. otherwise default judgment will be entered against you.

Here is an example of a Florida County Court Summons.

The Plaintiff’s Complaint:

A document drafted by the plaintiff outlines the claims against the defendant and what the plaintiff asks of the court. It is sometimes called a "petition." In addition to standard case captions, signature blocks, page numbers, and required certifications (see post on pleading formats), it includes the following sections:

• A statement of the grounds for the court's jurisdiction,
• an optional statement of proper venue,
• a statement of the claim showing that the pleader is entitled to relief, 
• an optional jury demand, and
• a demand for the relief sought, such as a judgment for damages, interest, or attorney's fees.

The Defendant’s Response

A defendant must present defenses to the plaintiff's complaint. A defendant's initial response may present defenses in a Motion to Dismiss or an Answer. We will focus on the defendant's written answer to keep things simple and reserve Motions to Dismiss as a separate topic.

The defendant's basic answer involves admitting or denying the facts claimed in the plaintiff's complaint. The answer may also include defenses of excuse, justification, or avoidance (affirmative defenses), and counterclaims. The defendant may forfeit or waive most defenses by not claiming them in an answer. A jury trial may be waived if not requested in an Answer.

By following this basic structure of complaint and answer, the court ensures that all parties have proper notice and the opportunity to participate in the legal process. In combination the Complaint and Answer frame the issues and they are each subject to revision by amendment in appropriate circumstances. 

Additional Considerations

Court Rules: To learn the specific requirements for summons, complaints, service of process, and answers, you must locate an official copy of the rules of civil procedure applicable to the court in which the debt collection lawsuit was filed. For example, search for "court rules for Indiana's small claims court."

Local court rules: State rules of trial procedure have different levels. Some rules apply statewide and some rules are local. You need both.

The definition of "Debt Collector" in the Fair Debt Collection Practices Act (FDCPA) is more complicated than you would imagine.

Most states have their own consumer protection and debt collection laws that differ from federal laws. You need both.

The best and fastest way to learn about court pleadings is to find several real-life examples. Understand and copy what professional lawyers have done in similar situations.

Useful references:

https://www.lawhelp.org/
https://consumer.ftc.gov/articles/what-do-if-debt-collector-sues-you