Many people are afraid of going to court. The judge, the jury, can be a scary place for someone who doesn’t do it every day. The truth be told, however, is that most credit card cases do not require the individual to go to court.
The truth of the matter is that many credit accounts that become delinquent do not result in immediate lawsuits. What happens in many cases is that the original creditor, whether it is a department store or a financial institution, sells the delinquent account to a collection agency or junk debt buyer. Buying and selling debt is a very big business. The original creditor does this to wash its hands of the bad debt, and the collection agency likes this exchange because it can buy these delinquent accounts at a substantial discount, often for just pennies on the dollar. What does this have to do with you going to court in one of these cases? keep reading
Credit card cases are typically what I call “document” cases. The credit card company, or collection agency, needs documents to prevail in court. In most cases, they need a cardmember agreement, terms and conditions, monthly statements and, if the debt has been sold, a copy of the Assignment. (The assignment is a contract between the original creditor and the purchasing debt collection company.) When a debt is sold, at least when it is sold for pennies on the dollar, the documents are often not sold as part of the deal. Most of you are thinking, “That can’t be true, right?” It’s the truth. Think about the price of debt. A collection agency pays pennies on the dollar, how much can they really get? Often, it’s just a name, address, phone number, account number, balance, and little else.
What does this have to do with you going to court? All. When a collection agency claim is filed on a credit card account, these documents are often missing from the claim. Your appropriate response is to hire a consumer attorney to defend your interests. The attorney will file documentation (called Objections in PA where I practice law) challenging the legal sufficiency of the claim. A judge must agree that the claim is insufficient and compel the collection agency to produce the proper documentation. If they cannot provide this documentation, and this is often the case, the court will ultimately dismiss the claim. You, personally, never end up in court. It is simply a matter of your lawyer handling the case and forcing the collection agency to provide their evidence or suffer a dismissal.
To be fair, I only practice law in Pennsylvania and can only comment on how these cases play out in Pennsylvania. In my conversations with other consumer attorneys in other states, there are often different procedures that must be followed to get these cases dismissed. Fortunately, however, most of these proceedings require only your attorney to be present in a court of law, not you.
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