Credit card debt is one of the biggest factors in consumer bankruptcies. What if you could successfully get out of paying that debt without going through a bankruptcy?
It’s possible and has been done successfully by thousands of people and businesses. The opportunity comes when the credit card company files a lawsuit to collect the debt.
Credit card companies don’t organize their records with an eye towards filing lawsuits for collection. They make a lot more money focusing on selling new cards than they do suing delinquent account holders. That means they often destroy important documents that they will need to prove the debt.
Compounding this if the fact that they often sell their delinquent accounts to other companies. Those companies rely on the debtor, never responding to the lawsuit. Most of their collections come from default judgments.
On the other hand, some debtors hire a well-versed defense attorney to fight the debt. There is a lot to fight over, and most cases end up being dismissed before trial.
The debtor ends up with no debt, no judgment against him and no bankruptcy.
Weak points in most of the credit card cases:
* Ownership of debt
* Contract formation
* Identification of the controlling contract
* Calculation of account balance
* Calculation of interest and fees
* Communications with the debtor
* Responses to disputes and validation requests
* Credibility of plaintiff’s witnesses
* Statute of limitations
Usually the defense attorney will begin by filing a general denial of the claim and then send out formal requests for production of documents and information regarding these weak points. When the plaintiff’s attorney files an affidavit to support a “summary judgment,” the defense attorney responds by taking the deposition (asking questions the witness has to answer under oath) of the person who signed the affidavit.
Sometimes the defense attorney begins by filing a motion to dismiss the entire case and forces the debt-buyer to prove that it actually owns the credit card debt.
Either method exposes the weaknesses of the debt collector, who will have to prove ownership, the terms and existence of the agreement, the interest rate, the account balance, the demands made of the consumer, and that the debt hasn’t become “stale” by law.
Some credit card agreements provide for binding arbitration, and the credit card company can get an arbitration award without going to court. In those cases, the opportunity actually comes at the second step – when the credit card company files in state court to enforce the arbitration award.
By that time, it is extremely difficult, if not impossible, to challenge the evidence. What is still open, however, is whether an agreement to arbitrate actually existed.
Also of benefit is the $50,000 consumer transaction exemption in the Texas General Arbitration Act, which means that arbitration isn’t available to credit card companies for a consumer transaction of less than $50,000.
There is nothing illegal or immoral from defending yourself in court or making the other side prove its case. All you need is a good attorney and a few good facts.
