Creditor Lawsuits Creditor Lawsuits

Before a Lawsuit Is Filed

Defending yourself from litigation—or potential litigation—is based on three basic premises:

  • Protecting your assets (see the section on Asset Protection) to minimize the impact if you are sued and a judgment is awarded.
  • Having affirmative defenses ready in case you are sued. For example, you may have unresolved billing error disputes with the original creditor under the FCBA. Or you may have gathered FDCPA violations such as a failure to verify and validate the debt or calls you received after sending a Do Not Call letter, etc., that can be affirmative defenses.
  • Responding to a suit in a timely and appropriate manner and requesting discovery.

Let's start with asset protection. Even if you are never sued, protecting your assets is still a smart move. Make sure you've done at least the basics: banking out of state, segregating accounts, and filing a homestead declaration (if applicable).

You can help lessen the impact of a judgment by taking smart asset protection steps now, while being aware of applicable fraudulent conveyance laws.

If you don't have any assets to protect in the first place and your income is exempt from collection, you have relatively little to fear from a lawsuit—at least not today. But since, depending on where you live, judgments are enforceable for periods ranging from three to twenty-five years, and may be renewable, you might have future assets to protect.

Next, there are some other proactive steps you can take that might provide affirmative defenses if a lawsuit ever comes down the pike. The first is billing error disputes.

> Billing Error Disputes

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