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If you have been sued by a credit card company, bank, or debt collector, there are a variety of tactics that may be employed in defense of these actions. The following information will help you to understand both the procedural aspects of defending a debt collection lawsuit as well as the legal defenses that may be asserted in response to such actions.
Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600 if you have been sued by a creditor attempting to collect a debt. Call today to determine what your options are against debt collection efforts throughout the areas of Suffolk County, Nassau County, Brooklyn, Queens and Manhattan, New York.
Debt collection lawsuits brought against consumers are brought either in the New York State Supreme Court or in one of the lower courts. In Nassau County, and in the western towns of Suffolk County, actions in which the amount sought is $15,000 or less are commenced in the District Court. If the amount is between $15,000 and $25,000, the County Court has jurisdiction, although collection lawsuits are rarely brought in this court in Nassau and Suffolk counties. Generally, if the amount sought is greater than $15,000, the action is commenced in the Supreme Court. In New York City, the New York City Civil Court has jurisdiction of actions up to $25,000. All debt collection actions for “consumer credit transactions” must be commenced in the county in which the defendant resides.
It is important to recognize which court you are being sued in, as certain rules of procedure vary. The rules of the Suffolk County and Nassau County District Courts and the New York City Civil Court are similar, while different rules apply in the Supreme Court.
When served with a summons in a Supreme Court, District Court, or New York City Civil Court action, you will have 20 days in which to answer the summons, if the summons was handed to you. If served by alternate means, e.g. left on your door, or served on someone else in your household, then you will have at least 30 days in which to answer if in District Court or NYC Civil Court. If the action is in the Supreme Court, you will have at least 40 days in which to answer it. (This is because you get 30 days from when service is complete. Service is complete 10 days after proof of service of the summons is filed with the County Clerk).
The most important step that you can take to preserve your legal rights in a debt collection lawsuit is to answer the complaint that is served along with the summons. In both the Supreme Court and District Court, the answer must be in writing. The answer must respond to each allegation in the complaint. In all courts (Supreme Court, District Court and NYC Civil Court), the answer must be in writing. The answer must respond to each allegation in the complaint. The answer is served by mailing it to the plaintiff’s attorney. In the District Court and NYC Civil Court, the answer must also be filed with the court clerk, along with an affidavit that the answer was served. If you fail to answer the complaint, the creditor will most likely obtain a default judgment against you.
While you can answer the complaint yourself, you will better protect your rights by retaining an attorney experienced in debt collection defense. This will ensure that the answer is properly prepared and that the correct procedures are followed for the particular court. Most important, all legally viable “affirmative defenses” must be asserted in the answer. An affirmative defense is a defense that goes beyond a denial of the allegations in the complaint.
In a debt collection action, one of the most important affirmative defenses to consider is that of the statute of limitations. All debt collection actions allege breach of contract. The statute of limitations for contract actions in New York is six years, with the period commencing from the date of the breach of the contract. The statute of limitations will generally start to run from the date that payment was due. However, partial payment of the debt, or a written acknowledgment by the debtor that a debt is owed, will start a new statute of limitations period. If a lawsuit is commenced after the statute of limitations has passed, it will be dismissed. However, the statute of limitations defense must be either asserted in the answer or in a motion to dismiss the complaint.
While the New York statute of limitations is six years, certain debt collection actions may be subject to a shorter period. In an important case handed down in 2010, the New York State Court of Appeals ruled that a contract action involving a creditor incorporated in Delaware was subject to Delaware’s three-year statute of limitations. It is therefore critical that the statute of limitations defense be considered in every debt collection case.
Many debt collection lawsuits are commenced by “debt buyers”, that is, companies that purchase debts from creditors for a small fraction of the amount allegedly due. Debt buyers often bring lawsuits with little, if any, documentation or proof of the debt that is allegedly owed.
If you are sued by a debt buyer, a properly prepared answer, asserting all possible affirmative defenses, will often deter the debt buyer from pursuing the case. Debt buyers prefer to obtain judgments by default and usually do not want to spend the money and effort litigating relatively small collection cases.
Bankruptcy is the most efficient and cost effective response to multiple debt collection lawsuits. This is especially true when you simply do not have any valid defenses to the debt collection actions. Because bankruptcy will discharge your obligation to pay most debts, filing for bankruptcy will usually make it unnecessary for you to defend state court debt collection lawsuits. However, in most situations, it is advisable to file for bankruptcy before defaulting on any lawsuits. This will avoid having default judgments entered against you. This is especially important if you own a home, to prevent a judgment lien from being placed on your property. Read more about liens and bankruptcy. Read more about bankruptcy in general.
New York Debt Help - Office of The Attorney General – The New York Attorney General’s office provides information for consumers about debt collection, examples of harassing tactics, laws regarding illegal debt collection methods, and how to file a complaint about unlawful debt collection practices.
Federal Trade Commission – The Federal Trade Commission (FTC) is a governmental agency that protects the nation's consumers from unfair and illegal debt collection tactics. It develops educational programs for consumers; makes information available to consumers about unfair collection methods; and provides consumers with methods to report illegal activities by debt collectors.
Contact the law firm of Andrew M. Doktofsky, P.C. today for a free consultation about defending a debt collection lawsuit in Suffolk County, Nassau County, Brooklyn, Queens and Manhattan, New York. Call (631) 673-9600 if you need assistance with debt collection defense in Long Island. This includes the communities of Deer Park, Babylon, West Islip, Bay Shore, Brentwood, Hauppauge, Huntington, Lindenhurst, Hempstead and nearby areas.